Pawn Shop guide step by step
The process of getting a loan can be exhausting and time-consuming. The availability of pawn shops has been a solution to those who do not want to face the long process in banks or other creditors.
Pawnshops lend loans in a variety of amounts in exchange for an item that is held as a pledge also known as collateral. The item is given back after the loan plus the interest is cleared and in case of defaulting payment then the item is sold to recover the amount. The beauty of the pawnshops is that you can opt to sell your item instead of taking a loan. It can even earn more money than getting a loan when an item is sold stores EZpawn.
The selection of the best is important to ensure you pick on the low-interest shop. Surveying around the area will help out in the selection.
The shops are regulated by the local authority or the government hence they are safe and trustworthy. They need to have a working license hence easy to establish a genuine lender or business. Their rates of interest are also controlled by the governing authority although their interest is usually higher than that of the street banks.
- No checking of creditworthy of the loanee so it’s easy to acquire the loan.
- The loan is obtained on the same day.
- The items can be recovered anytime upon payment.
- Items can be lost in case of defaulting payment.
- The interest rates are higher than with other lenders.
- In case the sold item doesn’t recover the loan you will be required to top up.
Things to pawn
Varieties can be used as pledges such as Smartphones, Televisions, Sofa sets, Gold watches amongst other valuables.
How much loan?
The amount of loan to be given is determined by the lender and in most cases, a low amount will be offered as they are on profit earning business. Good bargaining power will help out in making sure a good amount is received.
The pledged item will in most cases determine the amount to be offered because the loan should be some percentage of the item to be held. To ascertain some good amount then it is advisable to keep the item in a good state and clean, free from dust and cobwebs. This will enhance the appearance hence a higher loan. The item should be functional too in order to acquire a good loan.
Duration of the loan
The period of the payment is also agreed upon and can be between a month to 7 months. A receipt should be well kept as evidence of the agreement. Once all payment is made then the held item can be recovered. In case there is a need for an extension then the interest is paid and the item is pawned again.
Pawnshops are not all con business. Proper selection will help you, go for it.