Most of us are aware of and know what pawn shops are, even if we ourselves haven’t personally been to one. These pawnbrokers’ shops that sell unredeemable items to the public are quite the businesses that have always been around. It’s a great place to strike a deal on some great bargains and is very much like a bunch of garage sales and a flea market combined into one place. It’s also a place that provides people with a fast and easy way to borrow money in small amounts.
Here are five examples when it’s time to go to the pawn shop:
1. You need some quick cash. You bring in something that you own and give it to a pawnbroker, using it as collateral for a loan – which is called pawning. The pawnbroker loans you money as they keep your collateral, and when you pay them back the money along with interest, they will give you back the collateral. If you don’t pay back the loan, they get to keep your collateral.
2. You have something to sell to the shop. In this case, you take the item to the shop and tell them you want to sell it to them. You might even want to call the pawn shop first to see if they will even take the item. When they ask, tell them how much money you would like to get for it. Be direct and confident when doing so, but also polite and within reason.
3. You can repay your loan within a short term. If you are absolutely sure you can repay your loan in a short term, pawning an item makes sense. Otherwise, if you can’t repay the loan in a short term, it might be wiser to explore other loan options, as interest on a pawn shop loan can add up to a hefty price after an extended period.
4. Your property is easily replaced. Say you may not be able to repay the loan on time – you will most likely lose your collateral. If the item can be easily replaced, it could be worth it. If it’s something of sentimental value, such as a family heirloom, it’s irreplaceable and you will want to think twice on that.
5. You have bad credit and no bank account. It’s no secret that since the recession, many Americans have had to resort to other options to help pay for things, especially loans. While there are other options out there, pawn shops just may be an important – and sometimes the only – way to get a loan.
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