Cash advance loans from a pawn shop are a great way to exchange valuable items and get fast cash. You do not have to worry about your credit, credit history, or waiting days or weeks to find out if you are approved for your loan. All you need is a something of value that can be used as collateral to secure your loan.
How the Pawn Process Works
The pawn process is not too complex but does take a little time to complete. In most cases, consider a few hours of your time to get a pawn collateral loan. You will need to bring along some form of ID like your driver’s license. It is beneficial to bring along any receipts or other proof of ownership of the item. If you are pawning jewelry, watches, or gemstones, you should also bring along any certificates of authenticity.
Step 1: Take an item of value to the pawn store to have it appraised.
The first step in the pawn loan process is to take something of value to a pawn shop. The pawn shop will appraise it to determine how much it is worth. The appraisal is necessary to determine if what you have is original and not a fake. For instance, if you take in several gold chains, these are appraised to make sure they are real gold, not just gold plated.
Step 2: Receive your offer for your collateral loan.
The pawn shop will make you a loan offer on your item. The amount of the loan will never be the full value of the item. Rather, it is a percentage of this amount, which can range from around 25% to 70%. The amount you are offered will depend on:
- What the item is
- Its overall condition
- The demand for the item
- How easy it can be resold if you default on your loan
Step 3: Accept or decline the loan offer.
You are under no obligation to accept the loan offer. If you do not like the amount being offered or the terms and conditions of the loan, you can take your item and walk away. If you are satisfied with the amount being offered, go ahead and accept the offer. However, do not sign any paperwork just yet.
Step 4: Review the terms and conditions of the collateral loan.
Prior to signing your loan agreement, you want to take the time to read through the paperwork. The paperwork should list the item you are using for your cash advance collateral, along with any serial numbers or other identifying features. Next, the paperwork should clearly state the amount of money being borrowed and the repayment period.
The repayment period can vary from a one month loan to longer-term loans. During the repayment period, you may or may not be obligated to make regular payments. Some pawn shops do not care if you make payments weekly or just take one lump payment at the end of the loan period to get your item back.
Lastly, the amount of interest and any fees should be on the loan paperwork. You will need to pay back this amount of money on top of the money you borrow. For example, at GEM Pawnbrokers locations, we charge an interest rate of 4% per month. If you were to get a pawn loan for $100 for 30 days, you would owe $104 at the end of the loan period, along with any applicable loan fees.
Step 5: Sign the collateral loan agreement and walk out with your cash.
If everything looks to be good, sign the loan agreement. The pawn shop will give you a “pawn ticket” and your cash. The “pawn ticket” is, essentially, your copy of the loan paperwork. DO NOT lose this, as it is proof of your loan and the item you pawned. It is a good idea to put your “pawn ticket” in a safe place. You will also need the “pawn ticket” anytime you make a payment or want to pay off your loan and get your item back.
Step 6: Pay off your loan or not.
If you want your item back, you will need to pay off your loan. If you are struggling financially, talk to the pawn shop. Many shops are willing to work with you so you do not lose your item. Rather, they may require you to pay the current amount of interest due for the month to extend your loan.
On the other hand, if you decide you no longer want the item, just let the pawn shop know you don’t want it anymore. To recover the money they loaned you, they will take the item and sell it in their pawn shop instead. Just keep in mind, if they sell it for more than they lent you, you do not get the profits—the pawn shop does.
Pawn Loans vs. Selling
Another option, when you need cash fast, is to sell unwanted items of value directly to the pawn shop. Instead of taking out a pawn collateral loan, you just sell the items, give up ownership of them to the pawn store, and walk out with cash in hand. The selling process is similar to getting a collateral loan, with a few minor differences:
- Your items are appraised.
- You are given a cash offer for the amount the pawn shop will pay for each item.
- If you like the amount being offered, you sign a sales agreement. The sales agreement lists the items being sold and contains wording that basically states you are giving up ownership of the items by selling them to the pawn shop.
- The pawn shop pays you cash on the spot.
- The pawn shop then takes the items you sold and resells them in their pawn store.
Pros and Cons of Pawn Loans
Some of the benefits of pawn cash advance loans over selling your items include:
- You do not give up ownership of the item.
- You can get the item back by paying off your loan.
- You can use the item over and over to get new pawn loans—provided you paid off the previous loan.
- You may get more money for the item by getting a loan than selling it.
Some of the disadvantages of pawn loans include:
- You won’t have access to your item until you pay off your loan.
- If you don’t pay off your loan in time, you could lose your item.
Pros and Cons of Selling
Some of the pros of selling your items instead of pawning them include:
- There is no loan to repay, which means no interest or any fees to pay back.
- You can clear out any excess clutter from your home by selling items of value.
- You can use the cash you receive and buy different items at great prices from the pawn shop.
Some of the cons of selling your items include:
- You will no longer own them, so, if you have a cash emergency down the road, you won’t have anything of value to get a pawn loan.
- If you change your mind and want your item back, you have to buy it back from the pawn shop at the current resale price.
Best Items to Pawn
The best items to pawn to get a collateral loan or to sell for quick cash do change, based on market conditions, demand, and other such factors. It is a good idea to check with your local pawn shop to see what items are in high demand to get an idea of what is popular in your area. Here in the New York City area, some of the current best items to pawn include:
- Gold, Silver, and Platinum Jewelry – Rings, Necklaces, etc.
- Precious Gemstones – Diamonds, Tanzanite, etc.
- High-End Watches – Rolex, Audemars Piguet, Blancpain, etc.
- Gold and Silver Bars and Coins
- Power Tools
- HD Flat Panel TVs
- Video Gaming Systems
- Video Games
- Cameras/Video Recorders
- Musical Instruments
- Sporting Equipment
- Sports Memorabilia
Tips for Getting the Most Cash for Your Items
To get the most cash for items you want to get a pawn collateral loan for or sell at a pawn shop, here are some tips that could get you more cash in your hand.
- Make sure the items are clean and in decent shape. To illustrate, pawnbrokers are not necessarily going to want to give you a loan or cash for a smartphone with a cracked screen or a high-end watch that no longer keeps time.
- Make sure the item works as it is intended without any problems. For example, electronic items should power on and not overheat.
- Bring along any accessories, original packaging, owner’s manual, and other such things that go with the item. For instance, if you are pawning an iPad, you could get more if you have the charger, original box, and user’s manual that came with it.
- With vehicles, make sure they are clean and all maintenance is current. A pawn shop is not going to want to offer you a pawn loan if the vehicle doesn’t run, has exterior or interior damages, or needs lots of maintenance.
Some of the Benefits of Pawning at GEM Pawnbrokers
- Instant Cash Loans
- Over 70 Years in Business
- Highest Possible Prices Paid
- 24 Convenient Locations
- One of the Only Pawn Brokers in NYC to Take Vehicles
- One of the Few Pawn Shops in NYC to Buy New and Partially Used Gift Cards
- Friendly, Expert Staff
- GIA (Gemological Institute of America) and JA (Jewelers of America) Certified Staff
To find out how much your valuable items are worth and turn them into collateral cash advance loans or sell them outright, please feel free to stop by your nearest GEM Pawnbrokers location in the NYC area or call us at 718-596-5626 today!