Fake Pawn Shops are everywhere! – Know the laws when it comes to Pawn Loans

gold cash gold

There are many differnt options out there for consumers when it comes to finding a Pawnbroker to use.  We are here to let you know that at Garden City Exchange we follow all state laws and report to many different Police Agencies on a daily basis. When it comes to Pawn Loans we follow state law to the letter. When you come to Garden City Pawn for a Loan you will deal with highly trained & licensed Pawnbrokers where we will charge only 3% per month and offer 90 days to redeem your loan which is exactly the State law in Michigan.

Gold Cash Gold | © Thomas Hawk/Flickr

 

Don’t be fooled by the many Unlicensed Buy & Sell stores..

There are many Buy & Sell stores in the area that claim to be a Pawn Shop.  Many of them are charging between 10-30% interest for a 30 day loan.  Most of these stores are not Licensed as a Pawnbroker and should not be doing Pawn Loans. Always ask what interest rate the store is charging, if it is more then 3% per month then it is an illegal Pawn loan in the state of Michigan.

Here’s an overview of how a pawn loan works, and what to know before you agree to a pawn loan.  While pawn shops differ in estimate and loan prices, pawn loans generally work the same way between shops:

  • A customer brings in something of value, from a laptop to a gold coin.
  • The pawnbroker appraises it and gives the customer a fixed-term loan price for the item, plus interest, and a maturity date of the loan, usually 30 to 90 days. There is no credit check, as the loan is secured by the collateral. Michigan Law states that Pawn Loans must be 90 Days and 3% interest per month.
  • If the customer agrees to the loan price and conditions of the loan, he/she receives the agreed upon loan amount, and leaves the item with the pawnbroker as collateral to guarantee the loan.
  • The pawnbroker will give the customer a pawn ticket with their name and address, a description of the pawned item, the loan amount and the maturity date. The local police will also get a copy of the receipt.
  • When the loan is paid, including interest, the customer will receive the pawned item back. If a loan is not repaid, and no monthly interest payment is made, the pawnbroker will keep the item and cancel the debt.
  • Some pawn shops will allow the customer to extend the loan if they pay the interest on the loan.

 

american dollars in the hands

Do your research

Like any business, the reputation of pawn shops differs from shop to shop. Some are more professional and offer better loan prices than others. However, the highest loan price doesn’t necessarily make the best deal. Do your research before buying, selling or entering into any agreement with a pawn shop.

It’s a good sign when a shop is a member of the National Pawnbrokers Association.  Do some research ahead of time, ask plenty of questions and make sure you agree to the appraisal estimate, loan price and terms and conditions of the loan before agreeing to the loan.

Garden City Exchange is a Licensed Pawnbroker in the State of Michigan & in the City of Garden City.  Take a look

 

Check out this link to the National Pawn Broker Assoociation for a list of Federal Laws that regulate the Pawn industry

 

As Always Garden City Exchange will make the Highest and Best Cash offer we possibly can on each and every item that comes into our store. Don’t Hesitate to call or Text us anytime if you have something to sell or Pawn!
Call:  734-525-0777   |   Text: 313-215-6986

 

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