Need to make some quick cash? If you happen to have an attic, basement, or garage full of things that might have value but are only gathering dust, you should consider heading to a pawnshop. And although you could walk away with money in your pocket, beginners should learn the ins & outs of how these transactions work before they even enter the shop.
Some things you should know….
Firstly, pawnshops are regulated by 14 federal statutes & regulations, plus numerous state & local laws, says Emmett Murphy, spokesman for the National Pawnbrokers Association, or NPA. “The majority are clean, well-lit stores run by people who pride themselves on providing good customer service.”
Murphy advises checking with the local Better Business Bureau or looking on the NPA’s website for member stores in your area.
Getting the loan-
Here’s how a pawnshop transaction works:
- Pawnshops offer collateral-based loans — meaning the loan is secured by something of value. You take in something you own, and if the pawnbroker is interested, he will offer you a loan. The pawnbroker then keeps your item until you repay the loan. The loan amount will likely be a small fraction of the item’s actual value.
- You can sell your item to the pawnshop outright.
- You must receive a pawn ticket. Don’t lose this! Not only is it the receipt for your item, it also summarizes the terms of your loan: fees, expiration date, description of your item, etc.
Repaying the loan
You have 2 choices for repayment:
- Return to pay the balance, including the loan amount plus all added fees, before the deadline. Come to Traders to learn more about a loan.
- Don’t return and the pawnshop keeps your item.
In some locations, you can extend the loan period by up to several months, but you’ll incur additional charges.
The dollars and cents of pawnshop loans get a little complicated because: a) rules regarding the fees vary widely from state to state, and b) it’s not a cut-and-dry interest rate.
To learn the maximum rates allowed in your area, along with any rules regarding pawnshop transactions, check your state’s website; most likely, the information will be in the consumer protection section.
The bottom line: Make sure you understand the fees involved in your loan before you finalize the transaction. These terms also should be listed on your pawn ticket.
What pawnshops do and don’t want–
When considering pawning something, keep these tips in mind:
Don’t: Offer anything outdated, difficult to store or poorly made. Think about quality and value.
Do: Go with jewelry or coins, high-quality tools, and musical instruments, sports memorabilia, etc.
Now that you’re in the know about pawnshops, head on in to Traders Loan and Jewelry on the corner of Reseda and Sherman Way in the heart of the San Fernando Valley to experience the magic of pawnshops for yourself.