Pawn shops have surged in popularity in recent years, in part due to the struggling economy, the rise in the price of gold, reality TV shows such as “Pawn Stars” and “Hardcore Pawn,” and also the evolution of pawn stores into high-end collateral lenders. Consequently, taking out a pawn loan has become more mainstream — a legitimate and acceptable financial option for many people in need of some quick cash.
There are many types of people who take pawn loans, but the reasons are generally the same: They need money, but don’t want to permanently part with the item they are putting up as collateral for the loan, due to sentimental value or other reason. Whatever the reason—and pawn shops usually don’t ask — pawn loans have become a mainstream way to get cash, without having to sell a valued item.
According to the National Pawnbrokers Association (NPA), 70 percent of surveyed pawnbrokers reported that the quantity and dollar amount of pawn loans have increased since 2010. The NPA also reports that on a national average, a typical pawn loan is less than $150 for 30 days.
While pawn shops differ in estimate and loan prices, pawn loans generally work the same way between shops. Here’s an overview of how a pawn loan works, and what to know before you agree to a pawn loan.
Do your homework first
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. Check out this link for specific details about Loans from Garden City Pawn
It’s a good sign when a shop is a member of the National Pawnbrokers Association, and its appraisers are educated by the Gemological Institute of America (GIA), the world’s foremost authority on diamonds, colored stones, and pearls.
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. Finally, trust your instinct. If you like the pawnbroker and feel like you’re getting a fair deal, you’re probably right.