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.
