If you have never been to a pawn shop then you may not know how one works and how you could benefit from the services that they offer. So let us take you through how pawnbroking works.
What is pawnbroking?
Pawnbroking is the term given to a money lender who uses personal property as collateral for the loan which can be sold if the loan is not repaid within the agreed timescales. The loans that pawnbrokers offer are short-term loans which are secured against the collateral item.
How does pawnbroking work?
The process of pawning an item works by the individual bringing an item that they want to use as loan collateral into the pawn shop to be appraised. Once appraised the pawn shop will make a loan offer for an amount plus interest and a fixed term to repay the loan. If the loan is accepted the collateral item will stay with the pawn shop until the loan is repaid.
Unlike many loans, the process is quick and simple. There is very little paperwork to complete and there are no checks undertaken on your background and credit history, so this type of loan is available to more people. Loans are fast too because of this and you can walk away with the money straight away in most cases.
It is also worth noting that if you miss a payment or fail to repay the loan it won’t affect your credit rating, but you may lose your collateral item. If you are struggling to repay the loan in time, you should discuss it with us to see if we can extend the loan term to help you.
What can I pawn?
Pawn shops handle a wide range of goods so the list is fairly endless, so it is worth discussing your item with the pawn shop to see if it is acceptable as collateral if you have an item that is worth a reasonable amount.
Generally, some of the items that pawn shops tend to take as loan collateral are a variety of jewelry, watches, electronic goods, antiques, designer items and cars.
How much will I be offered for a loan?
The amount of money you will be offered as a loan will vary depending on the valuation of your collateral item. The condition of the item will also affect its value which is why an appraisal is undertaken so that a fair valuation can be given. The valuation and the loan amount however will differ as the loan will never be for the whole value of the item but for a proportion of it.
Where to go for a pawn shop loan
In New York you are spoilt for choice with pawnbrokers, however, GEM Pawnbrokers are one of the best New York City pawnbrokers. We have been serving the area for over 70 years and are the name you can trust with 24 conveniently placed stores across New York City.