Read This Before You Pawn, Sell Or Buy In A Pawnshop
If you're considering a loan, selling or buying an item from a pawn shop, E-Z Cash Pawnshop & theBetter Business Bureauoffer the following tips:
Do your research. Do some online research to see what others have said about working with area pawn shops. Then, choose a reputable shop and broker you feel comfortable with. Reputable pawnshops are generally members of the National Pawnbrokers Association and agree to a specific Code of Ethics. To research pawn shops in the area visit www.bbb.org Try to know an estimated USED value of the item in its existing condition. Bring items in good condition. Polish jewelry and dust or clean the items you are looking to pawn in order to help make them more attractive to the shop. Negotiate. Pawn store owners are resellers, not collectors. Set a minimum price ahead of time so you don’t make a quick decision you’ll regret later. Know if you want to pawn or sell. Pawn shops may give you the choice. The decision should be based on a number of things including your ability to repay a loan and the value you place on the item you are pawning or selling. An item may have sentimental value to you, but to the pawnbroker it is just an item to be held as collateral and has no sentimental value.
Consumer experts also offer the following advice: Shop around. When possible, visit more than one pawn shop to find the lowest interest rate for a loan or the best price for your item. Compare interest rates. Fees and Interest rates on loans are capped or limited in practically every state. Generally, you can expect to pay 25 percent in interest and fees on your loan, the allowable rate in Florida. Ask about extensions. If you can't pay back your loan in time, ask the pawn shop for a time extension, but be prepared to pay the fees and interest due an or before the due date for this extension. Get an appraisal. For items that may be valuable, consider getting a professional appraisal. You will have to pay for the appraisal, but you will gain important information. Not all appraisals are the same. There are insurance, cost replacement, retail appraisal and more. True value. True value of your item is what a willing buyer is offering to pay and a willing seller is willing to accept. When using an online service, be sure to understand the terms and conditions. Make sure the package will be insured and take photos of your items before sending.
1. What does a pawn store do? The core of a pawn store’s business is making collateral loans. Pawn stores offer loans, secured by something of value. The pawn store may have other business elements such as retail sales. However, pawnbrokers focus on lending money.
2. How does a pawn loan work? Customers bring in an item of value, and the pawnbroker offers a loan based on a percentage of the item’s estimated value. The pawnbroker then keeps the item until the customer repays the loan with interest and any additional fees that may apply. Pawn stores are regulated on a federal, state and local level.
3. How much money can I get for my item? On average, customers receive only a portion of the item’s retail value. Remember, the pawnbroker is loaning money on the item, not buying it. The pawnbroker must consider the cost of storage, security and future demand for the item, along with the resale value if the loan is not repaid. The average loan amount nationally is $150. However, loans can be made for any amount, depending on the value of the pawned item.
4. What kind of interest rate will I have to pay on the loan? Interest rates vary from state to state and usually amount to less than bank overdraft fees, utility reconnect fees, or credit card late fees. As an example, an $80 pawn loan at 20% for 30 days would cost about $16. Compare that to an overdraft fee or a credit card late fee that may negatively affect your credit.
5. What do I need to do to get a pawn loan? In order to secure a pawn loan, you simply need an item of value and proper identification. Pawn loans do not require a credit check, bank account or co-signer.
6. What happens if I don’t repay my loan? Defaulting on a loan can never affect consumers’ credit scores. Because the loan is based on collateral—that is, an actual piece of property—the loan is considered paid in full when the item is handed over to the pawnbroker.