Is a pawn loan the solution to your financial difficulties?
Contrary to many misconceptions and myths, pawnshops are a part of a highly regulated, upstanding industry, but separate from traditional financial lending institutions.
When you need cash to fill in occasional gaps in your monthly budget, pawnshops are a good resource. Modern pawnshops offer two options — you can either sell your items or use them as collateral for a short-term loan.
Pawning vs. Selling: What’s the Difference?
Pawning your items is different from selling them.
When you visit the pawnshop with the intention of selling your items, the pawnbroker will assess the value of the item, then make you an offer. Once you arrive at an agreement, they pay you in cash and they are then free to resell the item.
When you visit the pawnshop to get a pawn loan, the process works a little differently. The pawnbroker will evaluate the item, then make you a loan offer. If you accept, you must provide an official form of identification, then sign the loan agreement. To retrieve your item, you have to pay back the loan amount within the predetermined time frame, plus interest.
When You Need Maximum Cash
In general, if you’re trying to get the most cash possible, you should plan on selling your item. Pawnbrokers typically offer more for an item when they’re buying it because they can sell the item faster. The downside? Even if you return to the same pawnshop a few months later in the hopes of buying it back, it may very well have been sold.
When You Want Your Item Back
Leveraging your valuables for cash is a smart way to get a short-term loan. Plus, you can do it without undergoing a credit check. If you want to keep possession of your item, pay close attention to the terms.
Make sure you pay back the money in the specified time frame, which is usually less than a couple of months, and pay the interest too. Defaulting on a pawn loan can’t hurt your credit score, but it will result in forfeiture of your item.
Visiting Your Local Pawn Shop
Whether you decide to sell your items or use them to secure a pawn loan, make sure they are in good condition before you bring them to your local pawnshop. Only bring items that have clear resale value and are in working order, or are clean and polished, such as in the case of jewelry and watches. That way, you’ll be sure to get top dollar and find a solution to your need for cash.
Visit Premier Pawn in South Salt Lake — we help our customers solve their cash flow needs, whether you’re interested in selling your valuables or securing a pawn loan.
