by
Sarah Rodgers
|
July 19, 2021
Unlike banks, when you get a loan from a pawn shop, you don’t have to have a good credit score—finding out how a pawn shop does loans can be lifesaving information when the time comes, if need be.
To get a loan from a pawn shop, you will need to show a form of identification and have a form of collateral to use for proof of payment. When you go into a bank, the first thing they will look at is your credit score. If it’s terrible, you don’t even have the slightest shot at a loan. Pawnshops, however, will look at your collateral instead. Some forms of collateral are jewelry, entertainment items, video game consoles, power tools, antiques, and more. What happens is you bring your collateral into the pawnshop, and they look it over and place a value on your item. However valuable they see your item as that’s the amount of money you will get on your loan. So let’s say you want to get a loan on a $1200 ring. The pawnbroker will give you $1200 as long as you agree to pay back the loan as soon as possible. Most of the time, this is done using monthly payments. When you get a loan from a bank each month, a certain percentage of interest is added to the end payment; this is the same as with a pawnshop. If you don’t pay off your loan as promised, the pawnshop has permission to take your collateral as a form of payment and do with it as they please, whether selling the item or trading for profit.
As you have seen in many TV shows, pawn shops have a terrible reputation for buying stolen items. To help pawnshops avoid this pitfall, they are required to achieve proof that the item you are pawning belongs to you before agreeing to a loan. Some ways they can do this are by looking at an old receipt showing the date you acquired the item or looking at old pictures of the item. Sometimes pawnbrokers will also ask questions to ensure you are telling the truth.
An extension happens when you cannot pay back the loan in full on the final due date. When you cannot do so, you are allowed to get an extension on your loan as long as the state has approved it. When you set up a loan with the pawnshop, they give you a due date for when the final payment on your loan should be completed. When you don’t pay back the loan in time, you can get an extension which means that you will be given a new due date when the final payment is due, with the same interest rate and principal as before. You should also know that you must make a small payment to achieve an extension on your loan.
Much like a loan extension, a loan renewal happens when you are unable to pay back the loan when it is due. To get a renewal on your loan, you will have to get it okayed by the state and pay the total amount of interest on your loan, and then your loan will be reset. The interest rate will stay the same, but you will have more time to pay off your loan.
Thank you for reading our article on getting a loan from a pawnshop; if you are interested in getting a loan, Xtreme Pawnshop is the way to go. We can help you get the loan you need as soon as possible. Call us at (801) 876-1727
