A Pawn Shop is a businesses that offers loans to people for merchandise. When the loan is repaid merchandise is returned.
Yes, better sources of credit exist, like low interest credit cards or personal big bank loans, but a huge portion of the population is left out and sometimes need to borrow money for unexpected expenses.
Pawn shops are regulated by federal and state laws and are monitored by the police department to ensure that things reported stolen have a chance at getting back to their owner.
At a pawn shop, interest rates can be higher than those of traditional lines of credit, but still much lower than PayDay lenders who charge outrageous interest charges in short periods of time and can usually only lend you $250 and collect your bank account number, credit, and job information.
In most cases a pawn shop can lend you as much as you need, the name of the game is collateral, no credit required!
The obvious advantage of going to a pawn shop is that you can bring something and get instant cash. The other is that you can borrow money without credit and keep your merchandise in the end, if you plan on coming up with the money to repay the loan of course.
Pawnshops usually lend you money for 3 – 6 months, depending on the store’s policy and state rules. You can renew your loan in most cases if you can’t pay the loan back.
In California for example, pawnshops can charge you up to 3% interest per month for the first three months combined with additional writing and storage fees.
Typically a loan of $100 dollars at a pawn shop will cost you $14-18 in total interest and fees. When you pay your pawn shop loan back you redeem your item out of pawn.
Please note that people in the military on active-duty and their dependents are charged less in many cases due to the Military Lending Act which caps interest at a 36% APR.
Just like all financial services companies, a pawn shop makes money off the loans they write.
Pawn shops have been around for thousands of years for good reason. When traditional bank credit isn’t an option, you can borrow instant cash against your valuables without a credit check. If you don’t pay back your pawn loan they simply sell the item.
A pawn shop usually can lend 25%-50% of what your item is worth. Pawn shops are heavily regulated by federal and state laws and keep your valuables safe, for the most part. The important thing is that you educate yourself, get an instant pawn quote, and know the terms of the loan.
Shop around for a pawn shop that pays you the most and treats you well.
Remember, first know how much to get with our pawn shop calculator or jewelry calculator.
Then search for pawn shop locations open near your.
No middle man or waiting!