Understanding how pawnbroking works

Understanding how pawnbroking works

If you don’t know how a pawn shop works then read on to find out more and how pawnbroking can help you raise some cash from the items you have lying around.

First what is pawnbroking?

Pawnbroking is a name given to a lender who provides loans that use items belonging to the individual as security for the loan, known as collateral. They can sell the item to recoup their losses if the loan isn’t repaid. The loans available are normally short-term loans.

How do I pawn an item?

Pawnbroking is fairly simple and quick compared to other loan types available as there is not much paperwork to complete and there are no credit checks or background checks to complete. Therefore a pawn shop loan is more inclusive and available to more people.

To get a pawn shop loan you will need to bring your collateral item into a pawn shop for it to be assessed. It will be appraised and a loan amount offered for it. This will include the loan amount, interest and length of the loan. If you accept the loan, your collateral item will be securely stored for the length of the loan. You can walk away with the money straight away in most cases.

Loans can be repaid early without penalty and the collateral item is returned to you. If you are unable to repay the loan you should contact us to discuss it as we may be able to extend the loan term. This will not affect your credit rating as pawn shop loans do not impact it.

How much can I get a loan for?

The loan amount varies because it is dependent on the value of the item you use as collateral. This determines the loan amount, however, you won’t get the full valuation amount as a loan but a proportion of it. The appraisal will determine the value of the item and from that the pawn shop will decide how much they will offer as a loan against it.

What are the best items to pawn?

The best item to pawn is one that you will not miss or need during the loan term. You should choose an item that holds the right level of value for the loan that you need and bear in mind that the condition of the item will impact the value.

Some popular loan collateral items include jewellery, watches, designer goods, electronic items, antiques and cars. Many more items are accepted but there are too many to list, so the best thing to do is visit us at either our Margate or Hollywood stores with your item or contact us to see if we are interested in your item.

Find out what you can raise from a pawn shop loan today by visiting us.