Tuesday, September 11, 2018

The Basics of Pawn Loans

Do some research ahead of time, ask plenty of questions and make sure you understand the appraisal estimate, loan price and terms before agreeing to the loan. A pawn loan works like this:

  • A customer brings something of value, an expensive watch for example, to the pawn shop. The pawnbroker appraises it and gives the customer a fixed-term loan price for the item, plus interest, and a maturity date for the loan, usually 30 to 90 days. There is no credit check, because the loan is secured by the collateral (the watch). 
  • If the customer agrees to the loan price and conditions of the loan, he/she receives the agreed-upon loan amount and leaves the item with the pawnbroker as collateral to guarantee the loan.
  • The pawnbroker will give the customer a pawn ticket with their name and address, a description of the pawned item, the loan amount and …Read more.