When a person needs quick cash, he may turn to a pawn shop for a loan. Pawn brokers are in business to provide quick and simple loans to people in exchange for an item the borrower leaves as collateral. At the end of the loan term, the borrower can either repay the loan and claim the item, or not pay the loan and forfeit the item with no further penalties.
Time to Repay
The length of time to repay a pawn shop loan varies depending on the policies of the pawn shop, and the local or state laws that apply to the loan. Generally, a pawn shop borrower has between 30 days to four months to repay the loan and re-claim the item that he pawned.
Extensions
If a person who takes a loan at a pawn shop cannot repay the loan in the allowed time, he may be able to get an extension on the loan. The borrower will have to pay the interest due at the time of the extension. If he cannot pay the interest, he may forfeit the collateral. If the pawn shop will not give an extension, the borrower can repay the loan to reclaim the collateral and get a loan from another pawn shop.
Process
To receive a pawn shop loan, the borrower takes an item with value to a pawn shop. The pawn broker will inspect the item and ask the owner questions about it to help determine whether the person presenting the item is the actual owner. The pawn broker then offers an amount to pawn the item, usually just a small fraction of the item's value. If the borrower agrees to the loan amount and terms, and provides a government-issued photo ID, the broker gives him cash and a pawn ticket. The ticket is the legal contract for the loan, and the way that the borrower reclaims the collateral.
Best Pawn Items
Pawn shops are not interested in outdated items, or anything that is poorly made. They are also not interested in items that are difficult to store, because they have limited space. Pawn brokers are interested in items they can easily sell. Quality jewelry is a favorite with pawn shops, especially upscale dealers. Collectible coins ensure a good, quick loan, as their value is easy to establish. High-quality professional tools and musical instruments make good pawn shop collateral, as do firearms, if pawn shops are allowed deal with them, according to local or state laws.
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