If you are in a need of quick cash, approaching a pawnbroker is a good option. With the recent dip in the economy, pawnbrokers are very much in demand, as banks can’t cater to our short-term, small amount loans. Pawning is a very simple service and one of the easiest ways to get a loan. Here, the customer brings any valuable item and the broker provides a loan based on the good’s worth. One of the most common types of pawnbrokers is gold pawnbrokers, where you can pawn your gold assets in exchange for hard cash. There are few things that are to be kept in mind before approaching for a loan from pawn stores.
Following are the five things that you need to do before you visit a pawn shop:
The amount of loan that you need:
The main work of a pawnbroker is providing a collateral loan which is secured by the assets that you give. Based on the amount of loan you require, he will be able to offer you the best loan that will also be secure. It is not necessary to share your back story of why you require this amount. But a general idea of the amount is fairly advantageous. You don’t want to be clueless in the store and be in the loss as the broker might fail to provide the best loan due to lack of information.
Items accepted by the pawnbroker:
You might want to confirm about the types of items accepted by the pawnbroker. Like a will accept only gold coins or jewellery whereas others accept guns, cars or bikes. It is good to ring your broker before bringing the good to the store. Also, outdated electronic items like computers; TVs, etc. are best left at home as these are very difficult to pawn.
Double check your cost of the loan before accepting it:
A loan by pawnbroker is cheaper than bank loans or any other loan-giving company. Make sure that the pawn store is not overcharging. It is always good to have a second opinion. Also, it is better to have a general knowledge about the worth of your items in the market so that you don’t get cheated. Have a proper understanding of the loan contract along with the interest rate guidelines. The rates generally vary from place to place but nonetheless, it’s lesser than bank fees of overdraft or late fee for credit card. Always do a comparison of your costing of the loan. Say gold jewellery worth Rs.10000, the gold pawnbroker states the interest rates at 25% for a month. The cost of your loan is Rs.2500 which should be less than an overdraft fee affecting your credit.
Keep the items to be pawned in best possible condition:
One of the major factors on which your loan depends is the current condition of your assets. Old, unused and dirty jewellery is valued very less when compared to the same jewellery which is properly cleaned. If it’s a bike, then a shiny one will be priced much higher than the old scratched one. We should remember that the pawnbroker is giving us a loan and directly buying from us. He has to consider the cost of security, demands in future and also the resale value, in case the loan is not paid.
Know the worth of your product:
You should know the market value of your goods so that you don’t get cheated on. Note doubt the pawnbroker would be able to provide you with a figure and present to you an appropriate loan type. But it’s not good to heavily rely on the broker. Have your items evaluated from a knowledgeable store before approaching a pawn store.
Remember to get a loan from a pawn store; you just need a valuable item and a proper identification. Pawnbrokers don’t need any bank balance check or co-signer to give loans. So similarly, if you default a loan, then it doesn’t affect your credits as the loan is already paid as soon as you hand over the item to the pawnbroker.