3 Things You Need To Know About Pawning An Item

So, you're in need of a loan, but you don't want to go through the long and complex process of applying for a personal loan through your bank. You have some nice gold jewelry that you know is worth a pretty penny, so you decide you're going to pawn it for a loan at your local pawn shop. This can be a great way to get the short-term cash you need without going through a drawn-out loan application process, but there are some things you should know before you finalize the transaction.

What Your Item is Worth

Before you even go into a pawn shop, it's a god idea to find out the value of the item or items you're pawning. The best way to do this is usually to see a professional appraiser. He or she will be able to give you documentation stating the value of your item, which you can then bring into the pawn shop for leverage. Be aware, however, that you won't receive the full value of the item for your pawn loan; after all, the pawn shop isn't buying your item.

The Terms of Your Pawn Loan

Before you agree to a pawn loan, you should carefully read the fine print and make sure you understand the repayment terms of your loan. This includes:

  • the loan interest rate
  • any additional fees
  • how much time you have

Only once you're 100% confident that you know the terms of the loan should you sign the paperwork for it and receive your money. Never enter into a loan you can't comfortably afford to pay the interest on.

What Happens if You Don't Pay

With proper calculations and planning, you shouldn't have to worry about incurring penalties and fees for non-payment of your loan. However, mistakes happen and unforeseen circumstances arise, which is why you should be aware of what kinds of penalties and fees you could face in the event that you're late on a payment or can't make one at all. You'll want to avoid a late payment by any means possible, as these fees (combined with daily interest) can add up very quickly and make your loan seemingly impossible to pay off.

Pawning a valuable item for a loan at a pawn shop near you, like A-Wise Loan, is a viable option for getting the money you need without having to jump through a lot of hoops. Just be sure you keep the above tips in mind along the way.