Pawn shops are businesses that allow customers to access loans in exchange for valuable items. These valuables may include gold jewellery, electronics, cellphones, computer, cameras and other gadgets.
It can be hard to trust pawnshops especially with all the negative things that are said about them.
Before pawning your stuff, you should learn as much as you can about the pawning business.
One of the advantages of getting a pawn loan is the speed at which the loans are processed. Bank loans and other financial institution can take days or weeks processing loan applications. There is a lot of paperwork involved and a lot of verification. If you have valuable items to use as collateral, you can walk into any pawn shop.
Another advantage or reason why people choose pawn shops is because they don’t conduct credit checks. A pawnbroker won’t be concerned whether you have a good or bad credit score.
Pawn shops will take any items you have for a good price. However, some pawn shops like certain items more than others and will offer a higher price.
Pawn shops like authenticity and they will check the quality and authenticity of the items that are being brought in. They have experts that know how to tell what is authentic and what isn’t. It’s hard to dupe experienced pawnbrokers.
By pawning your valuables, you ensure that you can get them back. But you can only do so if you pay your loan back on time otherwise the pawn shop will have to sell your items.
Pawnbrokers are expert negotiators. They almost expect you to haggle your way to a good price. The question, they may ask before they make you an offer is what you want to get for your item. Then they will tell you how much they are willing to offer for it. You don’t have to accept the offer, rather do some haggling until you get to a price that is closer to what you need. Keep in mind though that pawnbrokers need to make a profit just like any other business but because they deal with used items, they cannot price their inventory according to what the market says it is worth.
Finally, the best advantage of pawn shops is that you can bring in as many items as collateral for loans as many times as you want and get it back when the loan is repaid. There is so much that is amazing about pawn shops, they are not places where thieves come to sell stolen goods. They are not some local shop of oddities.
With all the good and amazing benefits of pawn shops comes the disadvantages however these can be mitigated if the pawnbroker has the right strategy and the customers know enough about the business to know how to have realistic expectations.
Some of the disadvantages include:
The risk of losing your valuable items if you fail to pay your loan on time.
Pawn brokers often offer low amounts when negotiating loan amounts because the have to resell the item when the loan is forfeited.
Customers who are really strapped for cash usually find pawnshops more convenient than any short-term loan provider.