Are you in a tight corner and need some immediate cash? If so, a pawn shop might be just what you need. With the help of a pawnbroker, you can turn those valuable belongings collecting dust in your home into cash. This article provides further details on how pawn loans work.
Pawning an item doesn’t mean you’re selling it. A pawn loan (a collateral loan) is a sum of money received when exchanging an item of value (known as a pawn, collateral, or pledge). Loan amounts are based on your item’s worth, which the pawnbroker mostly determines.
A pawn loan works by visiting a pawn shop with an item you want to use as collateral. If you’re unsure where to find a pawn shop near you, a quick Google search will help.
For instance, if you’re looking for a pawn shop in Tucson, you’ll likely find shops like Cashbox Jewelry & Pawn Co. This is a well-known pawnshop in Tucson, Arizona, that has been in operation for over six decades. They help customers evaluate any value item, including home electronics, jewelry, and musical instruments. They also offer a loan term of 90 days with an additional 60-day grace period to help you recover your items.
How can you (and they) know it’s safe?
However, to be sure they’re dealing with a legitimate customer, they might run a quick mugshot search of your name on a site like GoLookUp. You can find information about many people on this site—from simple background checks to arrests and criminal records. The site also provides daily updates, so you do not have to worry about being fed outdated information.
Once they’ve finished a background check, the pawnbroker will assess your items based on their present condition, current appraised value, and whether they can sell them. Pawnbrokers have special tools they use to determine the value of an item. Items like electronics are also tested to make sure they are not damaged.
If interested, the pawnshop will suggest giving you a loan amount per the item’s value. Loan amounts may also vary from one pawnshop to the other. If you agree with the value placed on your thing, you’ll be given a credit agreement to sign. This agreement also varies from one pawnshop to the next.
No matter how fast you need cash, read through the contract thoroughly and ask for clarifications before appending your signature. The deal will include item value, loan term, and interest rate, amongst other salient details about the transaction.
The pawnbroker will then give you a pawn ticket or receipt. Don’t misplace it! You’ll need it when you go back for your item. Without it, you won’t be able to reclaim your belongings. You can make copies to be safe.
You can only get your item back after you pay back the loan. If you can’t pay it back during the redemption period, the pawnbroker can sell it to pay off your debts. You can also surrender your collateral as full payment. You’ll also need identification, like a valid state-issued ID or passport.
What can you pawn?
Although you can pledge anything of value, items you can pan vary per location and store. Anything that one can resell is acceptable. This includes jewelry, vintage cars, designer bags or shoes, electronics, musical instruments, camera equipment, and firearms.
Benefits of a Pawn Loan
A pawn loan is a promising avenue for individuals who do not qualify for a conventional or a bank loan—for example, people without bank accounts. Pawn loans are great for several reasons. They provide a quick and straightforward way to borrow money without a credit check, and you get the loan the same day. Another good aspect is that your credit scores are unaffected if you cannot repay the pawn loan. You also won’t be harassed by debt collectors or sued if you cannot pay back. Deciding whether to use a pawn loan for some quick cash is, ultimately, a personal choice. That being said, as long as you read the fine print carefully, there are many good reasons to use this financial avenue.
