Who doesn’t need some quick cash at some point? If you have valuable, unused items, you might have thought about visiting a pawnshop to make some money. If you’ve never made a pawnshop deal, there are some things you should know before you go. Beginners should learn the ins and outs of the trade before even entering the shop. Let’s explore!
What is Pawn Loan and How Does It Work?
Pawnshop loans are pretty simple compared to traditional loans. Also called collateral-based loans, you bring a valuable item to the pawnshop to be appraised. The pawnbroker makes an offer for your item. If you agree, they hold your item as collateral until you can pay back the loan. You’ll pay a small percentage of interest to get your items back. As long as you pay back the loan in the time you’ve agreed, you get your items back.
Once you agree on a deal, the pawnbroker will give you a pawn ticket. It’s similar to an invoice. It highlights the conditions of your loan, including the interest rate, fees, and due date. If you fail to pay back the loan, the pawnshop takes ownership of your items and can put them up for sale on the floor. Buyers visit pawnshops to look for valuable items at great rates.
When it comes to buying back your pawned items, you have two loan repayment options:
- You can pay the entire debt, including the loan amount, fees, and other amounts such as late fees and overdue before the due date or the extended due date, usually between one and four months following the initial transaction.
- If you can’t repay the loan, you lose ownership of your valuables. There are no collection actions taken, and it doesn’t impact your credit score. The pawnshop will simply put your item up for sale. If it’s still on the floor when you go back, you can buy it. However, you’ll probably spend a substantial amount of money more than your loan.
On average, about 80% of customers reclaim their belongings, according to the National Pawnbrokers Association.
Tips to Consider Before Visiting a Pawnshop
When deciding whether or not to pawn something, keep these tips in mind:
- Avoid presenting old, broken, or damaged goods.
- Consider bringing the most popular pawn items if you want to get the best deal.
- Gun, electronics, collectibles, and musical instruments are excellent options.
- As a general rule, pawnbrokers must make sure the property you are pawning is not stolen.
- If you can’t meet the terms of your loan and still want to get your items back, communicate! Most pawnshops are more than willing to work with you. While you might have to pay a late fee or additional interest, you’ll have your items back.
If you want to pawn or sell your items, Las Vegas Pawn is the place to go! Contact us or swing by our Moreno Valley pawnshop to explore your options.