In the past few years, pawn shops have become part of what many would call essential or basic services.
PawnMaster explains that when the pandemic hit, many pawn shops adapted to keep their doors open for their customers to provide needed services.
Pawn shops are important for many reasons, not just during a global pandemic.
They can be a valuable resource for those who need them while providing many services in one place.
Why Pawn Shops Are Important?
Pawn shops have offered small loans for collateral for decades; it’s how loans originally started hundreds of years ago.
These shops are also a great way to get used items at reasonable prices.
They offer a small variety of services for small fees, which can be convenient for many people.
- Bill Pay Services
- Money Transfers
- Check Cashing
- Small Collateral Loans (Pawning)
- Reselling Used goods
- Phone Services
Small Collateral Loans
In times of financial desperation, people can get small loans and use valuable items as collateral for those loans to get the cash they need to pay bills in a pinch.
These small loans are essential now more than ever during these trying times with the pandemic and rising basic living expenses.
People can use items of high value and little use, such as heirloom jewelry, as collateral to get a loan of equal value to cover immediate expenses with the ability to pay the loan back in payments.
This flexible cash option makes pawn shops valuable for many people and a means to stay financially afloat during the pandemic.
However, the loans are not huge, and rarely go over a few hundred dollars, and are termed for around 120 days.
Getting a loan through a pawn shop has many advantages over going through a bank or other financial institution, but it also has a few disadvantages.
Pros:
- Credit Score isn’t affected
- Collateral Based
- Shorter term length
- Smaller amounts
- Quick cash in hand
Cons:
- Higher Interest Rates than Banks
- Small Loans may not be enough in some cases
- Short term length could be more difficult to pay vs longer term
If a loanee defaults then the item that is used as collateral fully belongs to the pawn shop.
However, any item used for a loan cannot be sold for 120 days minimum, so it’s best to pawn items first before deciding to sell if those items are sentimental.
Pawning your valuables can pose a huge advantage for you if you’re in need of a small loan that no bank will provide.
Selling Items To A Pawn Shop
For some, a loan isn’t ideal, no matter what the amount it is, and simply prefer to just sell items that they no longer need or want but still hold monetary value.
Pawn shops frequently buy items and resell them later. Pawn shops offer a great resource when it comes to getting more updated electronics like:
- Cellular phones
- Laptop Computers or Desktops
- Gaming systems (XBox, Play Stations, etc.)
- TV’s
- Stereo Systems
You can also sell any jewelry, watches, precious gemstones, and precious metals that are just sitting in a box.
Any property sold at a pawn shop is legally held for 10 days, before the shop is able to place the items for sale on their shelves, thus allowing you time to change your mind if needed.
Why Pawn Shops Can Be Valuable To You?
If you’re unable to get a loan from traditional sources, then getting a loan through a pawn shop is the best route you can go.
You can also sell and buy gently used items within your budget without having to deal with private meetings like when buying from a private seller, without having to worry about if it is functional or fraudulent.
