What Exactly Do Pawn Shops Do?

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Admin

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August 29, 2018

How Pawn Shops Work

The way pawn shops work is a relatively simple idea. The word “pawn” is another term for a collateral loan. Our Pawnbrokers lend money on items of value ranging from gold and jewelrymusical instrumentstelevisionselectronicspower toolshouseware itemsfirearms, and more. These loans are based on the value of the collateral. The more valuable the item, the more we are willing to give. When a customer pays back the loan, their merchandise is returned to them. A customer may also choose to surrender your collateral as payment in full with no other consequences or fees attached.

 

Let’s give an example

Say you have a high-quality mountain bike but you need some fast cash. You don’t want to sell the bike because you’re a fan of the epic biking trails in your area. Rather than selling the bike for what it’s worth, you can bring it to a pawn shop and get a loan for a percentage of its value. The pawn shop will then store the bike safe and sound as you make payments on the loan. Once the loan is paid off, the bike is returned back to you. If however, you choose to surrender the bike for any reason, the pawn shop will obtain the bike as collateral and the loan will be dismissed without any other consequences or fees.

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