For the longest time, pawn shops have received bad press. Movies have portrayed them as unsavory businesses that trade in stolen goods. However, apart from being big business, pawn shops play an important role in society.
What is a Pawn Shop?
The reality is that these are professionally run businesses that are regulated by relevant authorities, and most owners pride themselves on their good customer service. Their core business is to accept personal, moveable property as collateral in exchange for short term loans. The items are held for a specified period before they are put up for sale.
Contrary to what most people imagine, most modern pawn shops are bright and airy, and they are often stocked with rare and unique merchandise.
What they offer
When you deliver the item that will serve as collateral to the shop, the pawnbroker will access its value and offer you a fraction of the amount as the loan. In addition to the cash, you will also be given a ticket or receipt for the item. After you repay the loan, it is against this ticket that you can reclaim your property.
Goods that are accepted as collateral include antiques, jewelry, musical instruments, and electronic goods. Pawnbrokers are required to verify ownership before they accept any items. They give you a set period within which to repay the loan plus interest. If you fail to meet the deadline, the shop is at liberty to put your item up for sale.
How They Help
Not everyone has access to banking services and bank loans, hence pawnbrokers fill this need. They provide a lifeline to low-income communities by offering quick loans without subjecting them to credit checks. These transactions are low risk, because should you fail to repay the loan all you stand to lose is the collateral and not your credit rating.
These establishments are also saviors in time of emergencies and offer a way of obtaining quick cash in times of crises. In addition, you have the prospect of being reunited with your valued property when you repay the loan.
Pawnbrokers enable the unemployed to obtain cash while they are seeking work, and old age pensioners to supplement their pension when the need arises.
Useful tips to remember when seeking a loan
- Before you pawn an item, find out its worth by scouring the internet for similar items on sale. This will help you to have an offer in mind when negotiating with the pawnbroker
- Alternatively, you may opt to use an online pawnbroker. This is a good option as it enables you to check offers from several shops before you zero in on one.
- It is important to keep in mind that what you present as collateral should be clean and in good working condition.
Pawn shops are certainly a legitimate source of quick cash for those who need it. However, bargain hunters will also be pleased to know that there are also good deals to be found there, if you are in search of special, unique collectables.
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