Pawnshops – you could have noticed one daily when you are walking your dog or on your way to work. A pawn shop is an excellent place to discover a lot of things you might find useful. Most of the time, many items you may never need but enticed to buy. Pawnshops are awesome when it comes to learning quite a few lessons.
If you have been watching the hit reality show, Pawn Star, then you might have discovered a lot about the United States history than you may ever have at school. We are here to find out if a pawnshop is truly a great place to buy stuff or sell goods. First, let’s know the things that usually happen in a pawnshop on a daily basis.
Pawnshop lends money or grant loans
For you to get funds from a pawn store, you must deposit a valuable item with the same appraisal value as the loan you are getting. When you exchange a valuable item in a pawnshop such as pieces of jewelry with precious metals and stones (gold, silver, diamonds, etc), gadgets, electronics, power tools, cellphones, laptops, and any other vintage item that can be resold. The pawnshop should be able to lend you cash instantly. You also have the option to sell the item on the different appraisal values. Remember, that the item you have to deposit must have a resale value that’s the same or higher to your required loan. Most pawn stores charge an interest rate of 5% to 25% per month.
Because of the interest rates of pawnshops, most of the loans are in short term. The contracts you’ll have can differ per state or area, but the usual loan term is around one month or 30 days. Extending your loan term is also possible as long as you pay the monthly charges plus penalties if there’s any.
In an event that you haven’t paid the pawnshop loan on the date that was issued on the contract, the pawnshop has the right to keep the valuable you deposited as collateral. On the other hand, if the customer paid the loan amount on time with the agreed interests, then the pawnshop will be returning the item to the customer. This type of loan is called a non-recourse loan that means if the customer did not pay off the loan, the pawn store can collect the pledged item, but the pawnbroker can’t go after the client’s personal assets unlike what the bank does.
If we base it on data, an average of 60% to 85% of pawn store loans is repaid on time. Pawn shops have always been easy access for people who have urgent needs of cash, they are also frequented of those repeat clients who are in need of quick cash. Most of the time, repeat customers will borrow money using the same item as collateral multiple times. Pawning the same item can help save time since more often than not, it doesn’t need to be appraised anymore, thus granting the same loan value based on the client’s previous records.
People Can sell them items
We mentioned earlier that customers have the option to sell their stuff from pawn stores on a different appraisal value compared to taking loans out of it. It is a pawn broker’s responsibility to be knowledgable about the price value of many items in the current market. Take for instance, when a client offers to sell the latest iPhone 11 to the pawn store, given that the phone is working properly, the pawnbroker will immediately know that he can resell the item for 700-800$. He can offer the customer 600$ for the item with anticipation that he can make a 100$ revenue out of it.
During item appraisal, the pawnshop appraiser or employee will identify if the item can be resold, because if not, the pawnshop will never make an offer to buy it. Every appraiser employed by the pawn store should be confident that they can easily resell the item in a timely manner, especially for gadgets or electronics on which values can easily depreciate in the market. Pawnshops cannot risk buying items that are not consumer-friendly, but they are most interested in buying items that have appreciative value over time such as gold, silver, diamonds, and other precious stones.
Pawnshop Can Sell Items and Consumer’s Buy it
For many consumers, pawnshops can be the best place to find valuable things at a bargain price. Most pawn stores are working diligently to attract those customers who are looking to buy items, they often display their best valuables in a clear window with prices for the potential customers to see. Many pawn brokers are also strategic in displaying items on their shelves, showing the most popular items in their market area, this is in a way that many customers have easy access and can easily see what they are planning to buy.
All pawnshops are also in compliance with various state laws, depending on their area of operation against stolen items. Thus, they often require additional information from customers such as valid identification, proof of address, and proof of ownership on some items. This is essential for the lawn enforcer to track thieves and wrongdoers with the help of the pawnshop’s data. Pawn stores always keep records of all their transaction, whether its granting loan, buying items, and selling items.
Because of the pawn store’s ability to give customers cash instantly, they have been considered as one of the most successful industries in the market. No more hassle to go to the bank or loan sharks for just a small of money needed for your emergency. Not only that, they have treasures on a bargain if you are a smart hunter, so you can find goods sold at a very cheap price which you can make a profit from if you also think to resell them elsewhere.
Now if you are shuffling loans from pawnshops on a monthly basis just to pay your bills, then you clearly need some intervention on your underlying money problems. However, if you want to sell an item which you won’t use anymore but has a great market value and sellable for others, head on to pawnshops like EZpawn who have online stores for some great dollar deals!