While I do not know what you have heard about a pawn shop, I can imagine it has not always been positive. You should forget everything you think you know about pawn shops and check out the rest of this article to find out more. If you have never been to a pawn shop, you may have the impression that it is a dark and dirty place where shady deals go down. The reality is, a pawn shop is a legitimate business just like any other, and federal and state regulations and laws govern them. Many of them are reputable businesses that want to provide great customer service.
It is important to know how the transactions work in a pawn shop. There are a couple of different types of transactions that may occur when you visit the pawn shop. They offer a loan that is based on collateral. That means you provide something of value to secure the loan. You take someone of value to the pawn shop. Just because you think the item has value does not mean the pawn shop owner will find it valuable. If the owner finds the item valuable, then you will be offered a loan. Keep in mind that the loan is only a small percentage of the value of the item. The pawnbroker then keeps the item until you pay back the loan.
Another type of transaction that can happen at a pawn shop is you sell your valuable item to the pawnbroker. The same rules apply; just because you think it has value does not mean they will. In either case, you are given a pawn ticket. Do not lose this ticket. It is your receipt for your item. It gives the details of your loan, the fees, the expiration date, and your item’s description.
If you go the loan option, you have 2 ways you can repay. You can repay the entire loan, which includes all fees, by the expiration date. This is usually anywhere from 1 to 4 months from the date you entered into the loan. You will also get your item back. If you do not return to pay the money, the pawn shop gets to keep your item. That is the end of your contract. You do not owe anything else to the pawn shop. There is no collection, and it does not get reported on your credit record. Some pawn shops will allow you to extend the time frame with additional fees.
Some items are more appealing to a pawn shop than others. Jewelry, coins, musical instruments, high-end tools, and firearms are always items in which a pawn shop is interested. They are not interested in items that are outdated or cheap. It is helpful if you have some idea of an item’s real value before you take it into a pawn shop. Something may be valuable to you because of the emotion tied to it, but emotions do not matter when they are looking at your items. They want items they can sell; after all, they are in business to make a profit.