These days, it’s hard to flip through the TV channels without coming across a pawn reality show. While they are great entertainment, highlighting some of the more unique items and personalities in the pawn world, they still leave many viewers with misconceptions about how the pawn industry actually operates. We’d like to clear up misunderstandings by answering 7 Common Questions About How Pawn Shops Operate that those new to pawning frequently ask.
What is a pawn shop’s primary function?
Pawn shops serve their communities by offering collateral loans to their customers. In plain English, this means that a pawnbroker will loan you money and, in exchange, will hold onto something that you own until you repay the loan.
Why would I get a pawn loan?
Unlike banks, who often won’t take the time to help customers who only need to borrow a small amount, pawn brokers offer a great way to get a simple, no-fuss loan. Plus, they are quick, involve minimal paperwork, and you get cash on the spot.
What do I need to secure a loan?
In order to secure a pawn loan, all you need is valid identification and an item of value. There are no credit checks, bank account details, pay stubs, or co-signers required.
What Items Can I Pawn?
Pawn shops accept all types of items as collateral including precious metals, jewelry, antiques, electronics, and musical instruments. At Common Exchange, you can even use your car or truck’s title to secure your loan. Simply borrow against the book value of your vehicle. Sometimes you can even continue to drive it while you pay your pawn loan back.
How is the value of my loan determined?
Pawn shops determine the amount they are willing to lend for a given item by taking into account a host of factors, such as the condition of your item, its current market value, the cost of storing the item, and its potential for resale. Remember though, the shop isn’t purchasing your item, merely loaning money based on a percentage of its value.
How long to have to repay the loan?
A pawnbroker will hold your item for an agreed period of time, generally anywhere between 30 to 90 days, as written on the pawn ticket. While interest will be charged, you can renew the loan period indefinitely. In the unlikely event that you cannot repay your loan, the pawnbroker will simply keep your item in exchange for the money they’ve loaned you. You won’t owe any extra fees and failure to repay will not affect your credit score.
Are Pawn Shops Safe? Absolutely! Contrary to what many may think, the overwhelming majority of pawn shops offer their customers a clean, friendly environment in which to do business. Plus, pawn shops are heavily regulated businesses that that take great care to comply with all laws governing our industry.
Visit one of your local Common Exchange Pawn Shops across BC today for yourself to learn more.