We’ve all seen pawn shops while we’re driving down the street and know they can be great places to buy gently used electronics, jewelry, firearms and more. But besides selling items, do you know about the other side of a pawn shop’s business? Continue reading for a crash course in pawn 101.
What is pawning?
In addition to selling goods, a pawn shop will provide pawn loans—also known as collateral loans—to anyone facing financial hardship. Pawn loans are often the best way to get quick money because they have low interest rates, and you’re approved for your loan in just a few minutes.
Typical items that are pawned include rings, necklaces, TVs, musical instruments, tools, guns and anything else that has cash value. The loan is based on the value of the merchandise being pawned.
The pawnbroker will hold onto the item until the person pays back their loan in full. Sometimes, people choose to surrender their items to the pawn shop instead of paying back their loans in full, and that’s perfectly acceptable.
Why would someone go to a pawnbroker for a loan?
Between personal bank loans and auto title loans, there are a few ways someone in a tight financial spot can get money fast, but perhaps the best way to get money is with a pawn loan. Pawnbrokers typically offer lower interest rates than other sources, and there are no legal ramifications if you can’t pay back your loan on time.
Repayment terms depend on the pawnbroker you’re working with, but many pawn shops will work with you to find payment terms you can afford. If you miss several payments, though, your item may be sold by the pawnbroker.
How much can you get for your goods?
As we touched on above, the amount you get for your loan depends on how much your collateral item is worth. After you bring in an item, a pawnbroker will appraise it and assign it a value. Someone getting a pawn loan will typically receive about as much money as a pawnbroker would be able to sell the item for in their store.
Are pawn shops regulated?
Banks and other lenders are highly regulated institutions, and the same is true for pawnbrokers. A few of the many federal regulations that apply to pawn shops include the USA Patriot Act, Truth in Lending Act and the Trading with the Enemy Act. Any pawn shop that sells firearms is also regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Because pawn shops are so highly regulated at the state and federal levels, you can be sure that you and your items are in good hands when you bring them into a pawnbroker.
Why should you come to Harrison Street Pawn?
If you’re looking to get some quick money, be sure to pay a visit to Harrison Street Pawn. We offer the most money for your items and have some of the most favorable interest rates you’ll find. Visit us today to pawn your items or to check out our vast inventory of goods.