What To Expect When Getting A Loan From A Pawn Shop

One of the challenges of obtaining a loan is that you are required to have great credit, proof of income, and you may even need references. Even if you meet all of these requirements, it can be a hassle to obtain a loan. A quicker and more convenient option is to turn to a pawn shop for a loan.

Arriving at the Pawn Shop

With a pawn shop loan, you will bring an item to the pawn shop and it will be appraised by the staff. In some cases, they might not be interested in the item. If they believe they can sell the item, they might offer you a loan that is worth a portion of the value of the item. They will also want to verify your ID and might allow you to create an account so you can pawn items faster in the future.

The Loan

The loan term will last for a certain number of months. Each month, you will pay a portion of the loan. You will always have the option to pay off the loan completely to receive the item back. Some pawn shops also allow you to extend the loan as long as you want.

Your item could continue to sit in the pawnshop for months while you make the minimum payment. However, if you miss the payment, your item might then be sold. However, this will not have an impact on your credit score.

If you have the ability to prove that you own the item, you'll have an easier time pawning it. While you can sometimes sell an item without proof of ownership, you'll need proof of ownership with much more valuable items. 

How to Receive More Money

You may be able to increase the loan amount by negotiating. If you believe that the item is worth substantially more than what the pawn shop is offering, make sure to speak up. However, a pawn shop will always offer less than what the item is worth so they can turn a profit and sell the item quickly.

Get Cash Quickly

Local pawn shops allow you to get cash quickly. As soon as the pawn shop accepts the item, they will then give you the full cash amount. This will allow you to solve a short-term emergency such as paying for car repairs. However, if you simply want to discard the item, you also have the option of simply selling the item for cash.