How Do Pawn Shops Work

How do pawn shops work? Tough economic times have people looking at pawn shops in a whole new light. Pawn shops sometimes get a bad rap, but, in reality, a pawn shop is a decent place for you to get a short-term loan on collateral or to find a good deal on merchandise. Stop in at your local pawn shop if you need any of the following:

1. A Short-Term Loan On Collateral
If you need money fast, you can pawn your salable merchandise at a pawn shop business for a loan. This means you give the pawn shop your television, ring or other valuable item, and you receive a loan for the amount the pawn shop decides the merchandise warrants. The pawn shop gives you the money and a pawn ticket, which tells you how much you will need to pay back at the end of an established amount of time (one week, one month, it all depends). That amount will be the amount of the loan plus interest and fees.

The pawn shop will store your collateral in the back of the shop where it will not be sold-as long as you pay back the loan, interest and fees by the end of the loan date established when you got the loan. If you cannot repay the loan at that time, you can renegotiate a longer loan with the pawnbroker, which will result in more interest and fees being charged, but may give you some wiggle room. If you do not repay the loan, the pawn broker will sell your merchandise and you will not have to pay anything, but if you repay the loan within the established time period, you will get your merchandise back.

2. Quick Cash
You can also just sell an item to a pawn shop instead of borrowing money off the item. If you have usable merchandise that is of value, you can sell your possessions to the pawn shop for clear and free cash. You won't get your stuff back, but you will have the cash to pay a bill or two.

3. A Good Deal On Merchandise
Pawn shops are like big flea markets. You can find good merchandise at fire sale prices in pawn shops. Because people sell their merchandise at low prices, you can get quality items at low prices, too. The pawn shop needs to keep merchandise selling so the shop has the money to buy more merchandise (or give out loans), so good prices are the norm.

Related Life123 Articles

When you're strapped for cash, it can be tempting to take advantage of quick cash offers. It's best to avoid cash advances, tax refund loans and borrowing from family or friends because these transactions can have long-term financial and personal consequences.

Is there really a way to make quick cash? Fortunately there is. Avoid debt and thwart money crunches with these sources for quick money.

Frequently Asked Questions on Ask.com
More Related Life123 Articles

Peer to peer lending is just what it sounds like-the opportunity to borrow money from a private individual, not from a financial institution. There are advantages and disadvantages to both the borrower and lender through this type of transaction, but for certain instances, a peer to peer lending situation works out for everyone.

It's always a good idea to save for major purchases, but sometimes you can't. In that case, a home equity loan is worth its weight in gold.

Your equity in your home can help you cope with an income that rises and falls and expenses that stay the same.

© 2014 Life123, Inc. All rights reserved. An IAC Company