As the world paces towards financial technology enabling all of us to live better lives, there are still small pieces of good resources that we can depend on for our small financial needs. In this article we will be looking at the process of pawning, what problems it solves and what must be known before striking a deal at a pawn shop.
Pawn Shops are places where you can get a micro loan by signing up an article of interest as collateral. The items could range from anything like gold, jewelry and an antique motor vehicle to items like video games etc. Loan amount on these items depends on the market value of the item and is typically repaid with an interest based on the initial agreement. In the event of non-repayment, these shops reserve the right to sell your item making a profit from the proceeds. The popularity of pawn shops shot up because they solved an important problem for people who are in need of immediate cash and can leverage an item that would have been useless in securing any mainstream source of loan.
What is Pawning and is it legal?
Pawning, as mentioned earlier, is simply a way of securing a quick loan by using an item as a collateral that may be of some interest to any buyer. Pawning is completely legal and the US has State Pawn Shops Laws. There is state licensing available and regulatory authorities take keen interest in forming laws for such activities.
Pawn shops had gathered bad reputation for cheating unsuspecting customers and there was a lot of hype in media about the pawnshops being non reliable and being seedy. However, these are all untrue and pawn shops can be a good source to secure quick loans in case you have exhausted all other options. Instead of the dingy stores that sometimes the media portrays them to be, they are clean well lit stores which are run by competent people. The only catch here is you have to check for member pawn shops from the website of National Pawn Shop’s association.
What does the transaction in a Pawn Shop look like?
- A New Hocke Pawn Shop North Miami Beach offers quick and easy collateral based loans. This means that when you take something that the pawnbroker perceives to be valuable, you can get an offer of loan on the item. Once you have got the amount, it is to be repaid within a fixed and agreed duration of time.
- Instead of securing a loan you can sell the item to the pawnbrokers also. However, the pawnbrokers are usually interested in offering a loan because it is much more lucrative than simply buying and selling.
- After having ‘pawned’ your item, you will receive a pawn ticket. This ticket summarizes the entirety of your loan as well as serves as the receipt for your item.
What are the repayment options available at a Pawn shop?
- You can either repay the amount in full, including the loan plus additional interest and claim your item from the shop all within an agreed upon time or duration.
- In case you are unable to make the payment, the shop gets to keep the item and acquires the right to resell it. No collection action is taken, and no adverse effect is accrued on your credit report. However, as per industry reports, most people reclaim their items.
What can be or cannot be sold at pawn shops?
Avoid using old, outdated items that have little value in terms of make and quality. Jewellery or coins make for an excellent sale at any pawn shop.
Do not fear the documentation. Pawn brokers are legally required to ask you enough questions and gather enough proof that you are the owner of the item that you are selling. Not carrying your identity cards is a cardinal sin because pawn brokers usually do not offer their services in case of a missing ID. So, these were just some of the things you must know about pawn shops in order to secure an easy but dependable fix to your financial crunches. Use pawn shops wisely in order to further your chances. Learn more about A New Hocke Pawn Shop, via this Haiti Open Magazine business profile.
