Getting a cash loan from a pawn shop is relatively easy as there isn’t a lot involved in the process. Today pretty much anyone can walk into any pawn shop located in any state to get a quick cash loan if they have something of value to pony up for it.
While getting a cash loan from a pawn shop isn’t rocket science, maximizing the value of your asset requires a little effort. On top of this, note that pawnshops must comply with both federal and state regulations which you must also familiarize yourself with before you set foot into one.
Let’s take a quick look at how pawn shops work in general before we get into the nitty-gritty details.
How Pawning Works
Simply put, you take something of value to a pawn shop in exchange for a short-term cash loan. The idea is that you take the loan and eventually repay it (with fees and interest – more on that later) and retrieve your item. Pretty simple, right?
However, not everyone that takes a loan from a pawn shop returns to retrieve their items. When this happens, the pawn shop must sell the items in question to make their money back. To keep their heads out of the water, a pawn shop must make sure that they are able to flip your item back on the market in the event you do not redeem it.
Getting The Most Out Of Your Item
When negotiating with a pawn shop, you want your items to be viewed in the best possible manner to maximize their potential value. This means not only keeping your items in good working order, but they must also be in pristine condition as well.
Remove any stickers, decals, or anything else you may have put on the item that wasn’t there when you first purchased it. Use isopropyl alcohol to remove any adhesive marks any decorative items may have left behind. If possible, remove any marks, scratches, dust, and other forms of dirt from the surface.
Keep in mind that if the item is damaged, the pawn shop will have some difficulty reselling it if you are unable to redeem it, which could drastically reduce its resale value. This means that the pawnbroker will offer you less when you attempt to negotiate a cash loan.
You will also want to make sure that you have all the parts and accessories that originally came with the product. Items with incomplete accessories and parts are more difficult to resell, and often are often valued for far less than their original price.
When pawning jewelry, make sure you have some form documentary evidence of its value. This way you can protect yourself better against lowballing and also allow the pawn shop to determine easily how much they can loan you. This also applies to non-jewelry collectibles, such as autographed items, art, vintage items, and antiques.
Playing By The Rules
When going to a pawn shop for a cash loan, make it a point to clarify the terms and conditions governing that loan to ensure you are getting a fair deal. Make it a habit to check the interest rates and fees associated with the loan. Shop around and compare between shops as the fees and interest rates they charge may vary greatly between them.
For example, some pawnbrokers charge a one-time fee for taking the loan (called an origination fee, a setup fee, or something similar). These costs are regulated by state law, so check what regulations apply in your state before walking into your neighborhood pawn shop.
You’ll also need to know how much interest the store charges for the loan. Most of the time, interest is charged monthly. Factor this in along with whatever one-time fees they charge to figure out how much the entire loan is going to cost you. If the fees and interest rates exceed the value of your item, it might be a good idea to simply walk away instead.
Lastly, check how long the pawn shop is legally required to hold your items before they can sell them to avoid any nasty surprises. Be sure to get this in writing somewhere – be it the receipt or some other documentary evidence. It is also a good idea to check when and how often payments are due, and what whether the pawn shop can legally forfeit an item if you miss out on any payments.
Finding The Right Pawn Shop
When it comes to maximizing your item’s value, there’s no getting around the fact that you’ll literally need to get some legwork done. Start by hitting up Google and Yelp to discover pawn shops around your area. Do your research to see what others are saying about the pawn shops in your locale, and which ones to stay away from.
Also, remember that some stores have specialty items that might fetch a better value for the item you are pawning off. If you’re pawning off a collectible item that is not a piece of jewelry, for example, look for pawn shops in your area that specialize in those.
This might seem a little tedious (and it is), but you’ll then need to list these pawn shops and visit them one-by-one to get your item appraised. See which of them offers the best value for your item and check the terms of their loans while you’re at it.
These days, it’s hard to come across a pawn shop that will give you the best price on your first attempt. Understanding the core business concept behind them will definitely give you an edge. You might even get some insight into what they are looking for when they appraise your items.
There are, of course, other ways of getting the quick money you need without resorting to that risky option. If you don’t want to deal with high-interest rates and run the risk of losing your valuables, consider Biltmore Loan for your cash needs. Only Biltmore provides the transparency and honesty that our customers need to feel safe and satisfied with their transactions.