Okay, here is one of those questions I expect to be asked from somebody who has never used a pawn shop ever.
The question is really simple, how do you get a loan from a pawn shop?
Well I’m glad to tell you that the process is normally very simple.
Obviously, you already know that pawn shops offer loans. These are most typically called pawn loans.
A pawn loan is a loan made against an item, otherwise known as collateral, that you leave at the pawn shop. The pawn shop will give you a certain amount of money to borrow during the period that you leave it there.
While the item is in pawn, there will be a certain interest rate that is charged against the money you borrowed.
In most cases, these interest rates are very low. For instance, in states like Pennsylvania it’s 3%, and in Ohio it’s 5%, but that having been said, there are also high interest rate states like Florida where it is 25%.
When you have the money to pay back the loan, plus any interest that may have accrued against the loan, you’ll want to return to the pawn shop and pay them.
When you have done so, they will return your item to you in the exact same condition under which you left it there.
What Do You Need To Get A Pawn Loan
In order to get a pawn loan at a pawn shop you will need an item that they typically accept.
In most cases, pawn shops are willing to work with almost any kind of valuable item that you have, particularly things like gold jewelry, consumer electronics, professional brand power tools, musical instruments, and sometimes even hunting equipment.
Since most of us already have these things in our homes, there is normally not a problem in getting a pawn loan.
There are some tricks however, and additionally, not all pawn shops accept the exact same type of merchandise.
Pawn shops are not like your normal big-box stores; pawn shops are owned by thousands of small individual business owners.
As such, each pawn shop may have their own idea about what makes a good item to accept in order to get a loan.
Because of that, you’ll want to ask the pawn shop you intend on working with what it is that they typically accept for a loan.
How To Find Pawn Shops In Your Area
This is a really simple process and one that I’ve described many times.
All you’ll have to do is go over to Google.com and search for local pawn shops, or pawn shops in my area.
Google will return a list of results that will include pawn shops in your area, along with their phone numbers and addresses.
Using this list, you should call the local pawn shops and asked them what it is that they typically accept for a loan.
While you have them on the phone, be sure to ask them what you will need in order to make a loan. For instance, some pawn shops require that you have a state ID while other pawn shops only require that you have some form of photo ID.
How Much To Pawn Shops Charge For A Loan
This is a much more difficult question to answer on a national basis because pawn shops are regulated by state and local laws.
What that means is, that the interest rates pawn shops charge, along with any storage charges should they charge those, are going to be determined on an individual state-by-state basis, and sometimes even on a city or smaller jurisdictional basis.
When you are calling pawn shops in your area to find out what you need to make a loan, and what items they accept, it is not a bad idea to ask them what their interest rates are as well.
In highly competitive areas, or areas where there are a lot of pawn shops nearby, you may find that some pawn shops charge less than the state set rate.
They do this in an effort to undercut the competition, by offering their customers a better value, in hopes of attracting more business.
If you do a little price comparison in terms of what interest rates are charged, you may find that you can get a better deal at one pawn shop versus another.
Is That The Only Kind Of Price Comparison You Should Do
Absolutely not. When you have an item that you’d like to pawn it is always best to take it to three pawn shops in your local area to see who offers you the most money for it.
In doing so, you will be able to get the highest loan possible and assuming that pawn shops charge the same interest rates, or nearly the same interest rates, you will end up on top.
This is no different than what you might do when you are buying something new from a store. It’s not uncommon for people to comparison shop between Walmart and Best Buy for instance, when looking for a new television.
Is It Safe To Make A Pawn Loan
Yes, it is completely safe. Pawn shops have been around for years, and it’s actually one of the oldest businesses that I know of.
They are in the business of taking people’s merchandise and protecting it while it’s in their possession.
As such, they normally have very organized systems for keeping track of everything and make it a priority to make sure nothing is ever damaged or misplaced.
As long as you come back to the pawn shop to pay on your loan on a regular basis, or repay the loan in full in the stated time that you agree to, you will have no problem getting your items back just the way you left them.
Additionally, pawn loans are known as no recourse loans. What that means is a pawn shop can’t come after you, or attempt to sue you, should you have to default on the loan if you cannot afford to repay.
There’s no risk to your credit record, or other significant risk that you have to worry about.
Can Anyone Get A Pawn Loan From A Pawn Shop
Typically speaking, any adult with the required identification will be able to make a loan at a pawn shop.
Because a pawn loan is a legally binding contract, minors typically will not be able to make a pawn.
Additionally, if you do not have the required identification as set forth by your state laws you will be unlikely to make a loan at a pawn shop.
That having been said, this is not really a concern for most adults. The only thing that you will need beyond identification is an item that the pawn shop accepts.
How To Get The Most When You Make A Loan At A Pawn Shop
If you want to get the most money possible while making a loan on something at a pawn shop, there are a few simple rules that you can follow.
First of all, make sure that your items are in good condition, complete, and clean. Pawn shops unfortunately have to sell some items that have defaulted, therefore they look at everything as if they would have to resell it one day.
The better condition your item is in, the more likely that a pawn shop will loan you more against it.
In the case of something like jewelry, it can never hurt you to have an appraisal with you. That having been said, an appraisal does not represent the value that a pawn shop loans on an item. They are typically going to be concerned with the karat and weight of the metal along with the size and quality of any diamonds involved.
In the case of something collectible, make sure that you have some kind of certification verification for the item that represents exactly what it is and that it is indeed something of collectible value.