Here's What You Should Know About Getting A Pawn Shop Loan

Are you thinking about applying for a pawn shop loan? Here are a few things you should know first:

What You Need to Get a Loan

You can't head into the pawn shop and apply for a loan like you would at a bank. You will have to bring something of value with you to be used as collateral when applying for a pawn loan. The pawn shop will want to hold on to the property you bring in for collateral until your loan is paid back. Once you've paid the loan back in full, the pawn shop will return your property to you. There are many items of value your local pawn shop may accept as collateral for a loan including: 

  • Jewelry
  • Stereos and Speakers
  • Instruments
  • Power Tools
  • Electronics
  • Rare Books

It's a good idea to call and ask about the item you want to use as collateral before bringing it in to make sure that the pawn shop will accept it. 

How the Loan Process Actually Works

When you bring your item to the pawn shop to apply for a loan, the clerk will inspect the item and offer you a loan amount based on the quality, condition, and value of the item. You may be able to negotiate a little bit, so don't be afraid to put your sales hat on and communicate the high value of your item as this may help increase the loan amount that you are offered. 

After being offered a loan, you will decide whether you want to accept the loan. If you do decide to take the loan, you'll fill out some paperwork and give your identification card to the clerk so they can make a copy of it and attach it to your file. 

You'll be provided with paperwork that tells you how much needs to be paid back for the loan and when the loan needs to be paid back by. Some pawn shops will allow you to make regular payments until the loan is paid off in full, while others ask for full payment at once. Expect to pay a little interest on your loan which could be anywhere from a few dollars to a couple of hundred bucks. 

What Happens if You Don't Pay the Loan Back?

If you don't pay your pawn loan back in time, the pawn shop will simply keep the item you brought them for collateral. So, even if you plan to pay every penny back early, it's a good idea to use something for collateral just in case you lose the item to the pawn shop. Anything can happen, so protect your most valued items from possible seizure by leaving them at home when visiting a pawn shop to apply for a loan.

For more information, reach out to a company like Mo Money Pawn.