If you need extra cash, applying for a loan is one of the easiest solutions you could find. However, it would take some time to process your application and get the money that you need. If you’re looking for instant extra funds for emergencies or anything urgent, going to a pawnshop is the best solution you could try out. If you haven’t tried pawning items before, there are some basic information you need to know first to help you through the ins and outs of pawnbroking. Read along to learn more.
Pawnshops Aren’t Scary
Some people think that pawnshops are shady or scary because of the things they hear from other people or even from media. However, it is actually the opposite. There are federal rules and regulations that rule over pawnshops to be sure that they are operating properly and providing good customer service to their clients. You could check for trustworthy pawnbrokers through the local business bureau.
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How Transactions Are Done
Pawnshop transactions work on a collateral basis. This means that you take something valuable that you own, offer it to the pawnbroker and if he or she is interested in it, you could get a loan. The pawnbroker will hold on to you item until you pay back the debt. The amount you could get is based on the value of the item that you offered as a collateral.
Although you could sell this item to the pawnbroker directly, they opt for lending you money instead since they could make more profit from it. Once you’ve completed a transaction, you’ll be given a pawn ticket. This serves as the receipt for your collateral and is important so you could redeem your item. Be sure never to lose it.
Paying the Loan
When borrowing money from a pawnshop, you have 2 options to repay your debt. First, you could simply return and pay the outstanding balance – the amount you’ve loaned plus the interest. This should be done before the due date which depends on the pawnbroker.
On the other hand, if you don’t have the said amount to pay your loan on time, you could leave your item with the pawnbroker. This means that you’ll lose your collateral item but you don’t need to pay anything in cash anymore. There are no other consequences when you can’t pay your pawnshop loan, just losing your collateral. This situation will have no effect on your credit score, or anything.
What to Bring
When pawning, the best things to bring are jewelleries or coins. You could also go for musical instruments, quality tools and even firearms. Pawnshops don’t prefer items that are outdated, cheap or difficult to store. Don’t forget to bring a government-issued ID since it is necessary for every pawnshop transaction.
Now that you know all the basics, you could go through the pawning process smoothly and more easily. Be sure to choose a pawnshop that you could trust so you’ll have peace of mind when you leave your valuable item with them.