If you are thinking of getting a loan from a pawn shop, then you should know how much you are entitled to. There are a number of things that pawnbrokers will look at before they determine the amount of loan to give you. Below are some of the factors that they consider.
Resale value Of Your Item
They assess the resale value of your item in terms of ranges; the lowest range being its wholesale value. This is just in the event the pawnbroker is unable to sell it at a retail price and decide to sell it to a wholesale merchant. The highest range is how much it would actually cost when someone else purchased your item at retail price.
For instance, your five year old PlayStation 2 may have cost you $1000 but as a used item in a pawnshop, it would retail at $300 because customers are wary that the pawnbroker could be selling them a “lemon” that he is trying to get rid of. Wholesalers that buy used electronics will probably purchase your playstation at $150 to $200. They purchase it at this price because they will incur the cost of having electricians to repair your item and sell it in stores.
Demand for your item
Pawn services usually take into account the demand of your item so that they can know if they will end up selling it to a wholesaler or selling it at their shop. If the pawnbroker believes that there are too many used Playstation 2 in the area, they may fear that they will only get $150 if they sell it to a wholesaler.
The pawnbroker has to factor in a few things such as electricity, heat, rent, etc., and a profit for the business. As such, you shouldn’t be shocked when they offer you $50 for your PlayStation2.
They Will Assess Your Likelihood Of Repaying The Loan
Pawn services look at your ability to pay the interest rate for several weeks, if you will return to reclaim the item and repay the loan. Since the pawnbroker wants to make a profit, they will want to take items that a customer is likely to come back and reclaim after paying interest for the period of the loan.
If a pawnbroker only accepted items that customers would never come back to reclaim, they would ideally be running second hand stores. The pawnshop owner will take into consideration many factors when determining if the owner will come back to reclaim their item.
For instance, if you have a disability and you pawn your wheelchair, the pawnshop owner will not have any doubts that you will come back to reclaim your item. Some customers will however try to convince the shop owner that something is valuable to them (this watch belonged to my grandfather, so I will come back for it).
The Salability Of The Item
If you take a very valuable item to a pawnbroker and ask for a loan, they will most likely accept it even though you asked for a very low price. This is because they know that the item has a quick turnaround so they won’t feel the loss if you do not come back for it.
You can now easily get a quick fix for your money issues through pawn services. You can get short term loans against valuables that you have including antiques, luxury watches, jewelry and any other item you think is valuable. Gone are the days when pawn shops were considered seedy and only dealt with questionable items.
Many people are nowadays considering taking short term loans from pawn shops because of the many benefits they can enjoy. These are some of the benefits of pawn services.
- Fast And ConvenientOnline pawn services are convenient because they can be accessed from anywhere across the United States and you can pawn your valuables online for easy cash. All you have to do is fill out an online form describing the condition of your items. From there, they will schedule a pick up and after a thorough inspection is done on your items, your loan might be approved. It is also a fast method of acquiring a short term loan because the process of pick up and loan approval takes approximately 24 hours.
- There Is no Impact On Your Credit ScoreUnlike taking loans from a bank, if you do not repay your loan, this will not impact your credit score. The only thing that you will lose is your valuable item. In addition, no credit checks are necessary unlike in other lending institutions. This means that even if you have a low credit score, you can still get a loan.All you need to provide is your item which will serve as collateral. The pawnbroker will then assess the value of the item and determine the amount of loan you are eligible for. They will also require you to provide some form of identification such as a government issued I.D or a driving license. You will also need to provide proof that the item indeed belongs to you.
- It Is SecureIf you go to a pawnbroker who is registered with the Better Business Bureau, you can be assured that the loan approval process will be quick and transparent. The pawnbroker will communicate to you the terms and services and will ensure that they are included in the pawn ticket. They also take special steps to ensure that they safeguard private information such as your bank account details.
- Competitive Interest RatesThe number of pawn services has increased and they all have to stay in business. Most pawnshops will offer competitive rates and other perks such as insurance to cover high end valuables. You can also borrow as much as you want provided the value of your item is able to cover the costs.From the above information, there is no doubt that pawn services are ideal for you if you are in need of a quick fix. Different pawnshops, however, loan against different items so you shouldn’t assume that they accept all types of items. Once you have figured out how they work and which items they accept, you can enjoy the convenience, privacy, security and competitive rates of pawn services.
If you find yourself in a fix and you need some quick cash without borrowing from a friend, then you should consider taking a loan from pawn services. With the economy moving from bad to worse, many people are now walking into pawn shops looking for short-term solutions to their financial woes.
Pawnshops have been portrayed as shady places where you can easily get conned out of your money. This image of pawnshops has been greatly enhanced by main stream media and so many people think that they are a no-go zone.
Pawnshops are actually regulated by 12 federal laws and numerous other local and state laws. Most pawn shops are well lit and clean and they actually pride themselves in providing top-notch customer services. To ensure that you are dealing with a credible pawnshop, you should check if they are registered with the Better Business Bureau.
Here is how porn services work:
- You can get collateral based loans. This means that just like in a bank, you have to provide something valuable and if the pawnbroker is interested, they will give you a loan. They will keep your valuables until you repay back the loan. The loan won’t be equal to the item’s value; most likely it will just be a fraction of the item’s value.
- Alternatively, you can sell your item to the pawnbroker directly but most of them do not like these kinds of transactions because they are not as profitable as loan transactions.
- Once you are issued with a pawn ticket, you have to keep it in a safe place. The pawn ticket is like a receipt and it contains terms for your loan, description of your item, expiration date, etc.
There are two ways that you can repay your loan.
- You can repay the loan in full plus any other additional fees before the deadline. Most deadlines are usually around four months after the initial transaction.
- You can leave your item with the pawnbroker and never repay your loan. This means that you will lose your item but there are no further repercussions such a bad credit report. According to National Pawnbrokers Association, 80% of customers reclaim their items. In some states, you can extend the loan period by up to several months but you will have to pay more money.
The interest rate is complicated because it is not cut and dried and it varies from state to state. Finance charges can vary from 5% per month to 25%. For instance, in Indiana, the interest rate is 3% per month but pawnshops can charge an extra 20% for service fee. This means that the maximum allowable interest rate is 23% per month. In New York, the interest rate is 4% per month and $10 for service charge. The rates vary but the most important thing is to ensure that the pawnbroker explains all applicable fees beforehand. The terms and conditions should also be clearly stated on the ticket.
The next time you are in need of a short loan, consider seeking