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 (also called 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 first visiting a pawn shop with an item you would like 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, very likely, you’ll find shops like Cashbox Jewelry & Pawn Co. This is a well-known pawnshop in Tucson, Arizona, in operation for well over six decades. They help customers evaluate any item of value, including home electronics, jewelry, and musical instruments. They also offer a loan term of 90 days with an additional 60 days grace period to help you recover your items.
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 The site also provides daily updates, so you do not have to worry about being fed outdated information.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 in determining 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 value of the item. Loan amounts may also vary from one pawnshop to the other. If you agree with the value placed on your item, 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, 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 what you owe. You can also surrender your collateral as full payment. Note that you’ll also need some identification like a valid state-issued ID or passport.
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, a vintage car, designer bags or shoes, electronics, musical instruments, camera equipment, and even firearms.
Pawn loans are great for several reasons. They provide a quick and straightforward way to borrow some money without a credit check, and you get the loan the same day. 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. Another good aspect is that your credit scores are not affected if you cannot pay back the pawn loan. You also won’t be harassed by debt collectors or sued if you’re unable to 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 definitely many good reasons to use this financial avenue.