What is a Pawn Shop?

February 26, 2015 - 4 minutes read

What Is a Pawn Shop?

What exactly does it mean to PAWN an item? What is a PAWN LOAN? What is a PAWN SHOP? All of the above are valid questions if you have never before used a pawn shop or pawn broker for a short term pawn loan.

Here’s How Pawn Loans Work:

PAWN SHOPS offer secured loans or pawn loans to people with items of value that can be used as collateral. When you pawn an item, you are giving your items to the pawn shop to hold for the cash that you receive. Pawn loans are generally short-term loan loans usually for a period of 90 days during which you have the opportunity to redeem an item. Pawn Loans are usually redeemed for the amount of the loan plus some agreed-upon amount for interest. If the pawn loan is not paid (or extended) within the time period, the pawned item will be offered for sale by the pawn shop.

A Pawn Loan is Never Reflected on Your Credit Score

Unlike banks and other types of lenders, the defaulted pawn loan will not affect your credit score. There are many factors involved before the transaction can be effected. For example: the pawnbroker is at risk that the item in question may be stolen, forged or tampered with in way which might be unseen at first. This could devalue the item and it may not fetch back the expected return in case of a default on the pawn loan. However, under the jurisdictions of states, it is mandatory for the pawnbroker to keep a record of time, places and the visual record such as a snapshot of the client. This helps to keep track of the persons and the items.

Assessing Risk Factors for Pawn Loans

The other factor the pawnbroker has to assume before committing to a pawn loan is to determine whether or not the said client will come back to redeem the item. This is important in the event of an item such as electronics is pawned. Electronics generally hold minimal value if dealt with a wholesale rate when compared to retail cost. So it is imperative for the pawnbroker to consider all the odds of buying such item and the amount that is to be offered for the pawn loan or the sale value. Precious items such as jewelry, gemstones gold and silver metals often fetch handsome values for pawn loans and sale. The pawnbrokers mostly pay out the best prices for such items since these are easy to sell and pledge items. Many pawnbrokers have started different loan programs to appeal to different segments of the society.

North Scottsdale Loan & Gold has recently started short to medium term pawn loan extension programs for the students of ARIZONA STATE UNIVERSITY. The students can have short or medium term pawn loans against their items like laptops, MP3 players, iPads and iPods. The terms and condition of the pawn loans are also slightly easy to go with such trades compared to general business trends. So if you are looking for a short to medium term pawn loan against a valuable item that you possess. Perhaps you are willing to get paid the best price for your used items. Visit North Scottsdale Loan & Gold first in order to have a free appraisal of the value and the amounts we can provide for a pawn loan or an outright sale.

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