Pawnbrokers will take a variety of personal property as collateral, such as wristwatches, rings, and computers. Your item should have some value, but does not have to be a lot. Average loans are $20.00 to $100.00. You take your personal item to a Pawn Shop for collateral and the Broker lends you money for usually 30 days.
Your 50 year old Timex watch inherited from your dad, is sentimentally valuable, but may not have much monetary value. Don’t be surprised if you are offered only $10.00 for it. Try to pawn objects that are made from silver, diamonds, or gold or items with brand names like Gucci, and even better if you pawn something that has no sentimental value and you won’t regret not getting back.
Be realistic when you bring your item in. It is business for the Broker and they know exactly how much they could resell your item for. They also know that there is a 60% chance you will not come back to reclaim it and they will need to sell the item to get their money back.
When you pawn an item, the Pawnshop Broker will take your name and address, verify it with your driver’s license and then inspects the item carefully. They will also test diamonds and gold for authenticity and make sure your TV or computer works properly. If there is a serial number on the item, it’s also recorded on the pawn ticket.
When you agree on the loan amount, the Broker will give you a ticket for your item. The ticket should state:
- The item that you pawned
- The amount of money loaned to you for the item
- The amount of money due in 30 days to get the item back
Also, ask if there is an extension period, in case you do not have the money in 30 days. Also, ask the Broker if they will notify you when the time has expired to give you a final opportunity to redeem your property.
Before 30 days, if you see that you will not have the money in order to reclaim your item, and your Broker will allow you to extend your loan period, then make sure you go to the Broker before the last day. Some Brokers will allow you to extend your loan for a monthly fee, which usually means entering into a new contract for the next 30 days. Be sure to ask what the interest rate is going to be as some Broker’s will charge as high as 25 percent on the new principal, which can really add up. Other pawnshops will allow you to continue paying 25 percent on the original principal.
Tips & Warnings
If you do not claim your item in 30 days, it is no longer yours. The Broker must keep the item though, for 90 days in storage before they are allowed to resell the item. Good news is if in 60 days you have the money to buy the item, you can, bad news is you will have to pay the price the Broker is reselling it for.
In some states, Brokers are required by law to file with the local police a daily list of items that have been “pledged”. This gives the police an opportunity to check these pledge items against any list of reported stolen items.