Money

Published on October 1st, 2013 | by KateSimmons

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Cracking The Code Of Pawn Shops

If you have ever wondered how a pawn shop works and whether it is a safe business, there is not that much you need to know. You may be nicely surprised to learn that there does not seem to be anything complicated about how pawning works. Also, an even bigger surprise might be the fact that it is an extremely safe business. Read on, and do not be afraid to visit your pawn shop one day.

How it Actually Works

What pawn shops offer are collateral-based loans. The loan is secured by a valuable item which is kept until a settled date and each month a small fraction of the loan’s worth is being paid by you as the interest rate.  The pawn ticket you receive with your loan has all the relevant information on it: identification of your item, fees, expiration date, and more. Make sure not to lose it and refer to it if you have any questions for your pawnbroker. Repaying of the loan is not that complicated either: you pay the loan back and all the added fees by the deadline agreed and indicated on your pawn ticket or the pawn shop keeps your item. Sometimes, extensions are possible yet that can only be determined by your pawnbroker. Not repaying the loan does not result in any legal action or decreased likelihood of being granted another loan, so it may seem truly convenient in some situations.

Can Serve as a Storage Space

Interestingly, in addition to buying, selling, and trading items, a pawn shop can serve a cheap storage place.  The same pawn shops that buy gold, for instance, can store your motorbike if you take a loan and use it as a collateral. In this case, you will pay the monthly interest rate that might be less than what you would pay for a storage service for the same bike. Technically, you are simply getting a loan from a pawn shop. Yet in real life it can help you in another way. Hence, it is one of the additional uses of a pawn shop that not everyone thinks about.

It is Safer than you Think

Probably due to the images perpetuated in movies, pawn shops are often associated with sketchy businesses where desperate people come to sell their last belongings. Well, in real life, the way pawn shops operate is actually extremely safe and simply opposite to what the movie industry so vividly portrays. In fact, pawn shop business is heavily regulated and is always in contact with law enforcement institutions. Items in pawn shops are cataloged, they all have IDs that are checked and sent to law enforcement agencies, minimizing the risk of getting a stolen item. In addition, the statistics show that around 80 percent of pawn shop customers in the US actually return to their shops and use their services again, indicating a high level of trust within this kind of business. Thus, do not let the media trick you: pawn shops are businesses like any other business, with people working to leave their customers satisfied.

Try for Yourself

Knowing what you know now, do not be afraid to use a serve of a pawn shop if you want to. It is not a sketchy business, it can provide you with some fast cash or buy an item you always wanted to get rid of. And, interestingly, it can even store your vehicle! The conclusion here seems to be this: when its code is cracked, a pawn shop is really just another business in your community the services of which you might one to check out one day.

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About the Author

Kate Simmons is a freelance writer and occasional blogger. If her article got you interested, feel free to follow or reach out to her via G+ or Twitter.


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