During financial hard times, many people turn to pawn shops and pawn loans when looking to raise some emergency cash.
However, before you consider going to a pawn shop, you need to understand how a pawn shop works and what to pawn to make money.
Below are the steps you will need to follow in order to successfully raise money by visiting the local pawn shop.
The Process of Pawning
Pawning is the process of borrowing money against the value of one or more of your personal items. Essentially, pawn loans are another form of collateral loans.
You can use gold, silver, platinum or diamond jewelry to get a pawn loan, or you can use more basic goods like household items, or exotic items, like musical instruments, collectibles and anything else that has some value. Gold, precious metals and jewelry are typically the most useful items to pawn, since they hold their value over time, while electronics and computers depreciate much more quickly, and won’t net you much money from a pawn broker.
When you take your items to the pawn shop, the broker will evaluate them, tell you what they think they’re worth, then offer you a short-term loan based on the value of your items.
If you agree to take the loan, the pawn shop takes temporary possession of your items, storing them away for safe keeping so that they can be returned to you in exactly the same condition that they were received.
When your pawn loan comes due, if you can pay it all back in full, you’ll get your items back. If you can’t afford to pay the loan off, the pawn shop will serve you a 30 day final notice, offering you the chance to either pay off the loan in full, or extend the loan by paying interest and other fees.
If you can’t make those payments, then the pawn shop is legally allowed to take possession of your items by transferring ownership of the property from you to themselves, and you will be forced to buy the items back from the pawn shop at whatever price they decide to sell them at.
Advantages of Pawning
Pawn loans are available to people with no credit, bad credit, or other financial problems since the loans are secured by collateral (whatever items you pawn).
That means pawn shops are a great place to get a loan with bad credit and no credit check.
Pawn shops are also able to provide you with a loan quickly, getting you the cash you want the same day (and often within minutes), but there are some downsides as well.
Downsides of Pawning
Pawn loans aren’t cheap, with a high interest rate placed on the loan to ensure that the pawn shop gets some value out of lending you their money for a limited time.
Pawn loans also don’t run for very long, with the average loan period ranging somewhere around just 90 days. That means you only get 3 months to pay back the loan before your items are taken from you, which for many people, simply won’t be enough time to come up with the funds.
And finally, pawn loans typically don’t provide much cash, with most loans ranging somewhere in the $100 to a few hundred dollars range. It is possible to get a larger loan from a pawn shop, but to do that, you’ve got to have more valuable items to pawn.
Alternatives to Pawning
If you need to raise money quickly, but don’t want to risk a family heirloom, then consider taking out a car title loan instead.
Car title loans are a form of secured personal loans that use the equity in your vehicle as collateral for a loan, allowing you to raise a great deal of money instantly.
Better yet, car title loans from Car Capital Financial don’t require you to stop using your vehicle throughout the course of the loan, meaning that you’ll get a cash loan, but still be able to drive your car, motorcycle, rv, boat or other titled vehicle as much as you like while you’re paying the loan back. Title loans are issued based on the borrower’s ability to repay the loan.
Car Capital Financial is Southern California’s leading auto title loans company and has offered safe, reliable and affordable title loans for over 15 years.
To get you the money you need in as little as 30 minutes, give us a call now at 1-888-500-9887.