Need some money quickly but don\’t know what to do? Pawn shops might prove to be a solution. However, it might be a major concern for many people that some of their valuable goods have to sit in a shop in exchange for money. The biggest fear that surrounds pawn loans is that the pawn shop will sell the items without even letting you know.
But, contrary to popular belief, it is common for pawn shops to hold items for some time before selling them.
So how long do pawn shops hold items before selling? And, why do they do so? How do pawn shop loans work? Let’s find out in this blog post!
What is a pawn shop?
Pawn shops are privately owned shops that provide secure loans to people, with their personal items as collateral.
Since there is no paperwork involved, pawn shop loans also don\’t really hurt the credit scores of people in case they fail to return the money they have borrowed.
Pawn shops are, however, often misjudged and have many misconceptions surrounding them. One of the most common misconceptions is that pawn shops fraud people by selling their items outright. However, all pawn shops strictly observe the \’waiting period\’ concept. Such misconceptions only discourage people who need help from finding it at a reliable pawn shop.
Why are pawn shops popular?
A lot of people struggle to make their ends meet. Even financially stable individuals sometimes need some extra money as quickly as possible. Banks may be a popular option for loaning money for some. However, for those who don\’t have a great credit score or those who don\’t want to take the risk of a loan messing with their credit score, a pawn shop is a great option.
Pawn shops do not operate with a lot of paperwork. The only document required for pawning items at a pawn shop is a government ID card.
In the absence of paperwork, pawn shops recover the loan amount by selling the pawned item in case the loan isn\’t paid back; without hurting the credit scores of their customers.
Should I take a pawn loan or sell my items?
Even though many people prefer pawn loans, pawn shops are also known for buying things from their customers. When you sell an item outright, it is obvious that you make more money from the sale, as compared to a pawn loan. So, selling the item might be tempting for some people.
However, the conclusion to the age-old trope of pawn loans VS selling depends on whether or not you want to get the item back or not. If you want your item back, it is better to opt for a loan. This way, you can even keep taking loans on the same item multiple times. However, if you are done with the item, and you think that you will not be able to pay the debt, it might be a better option to sell the item.
What happens to the items after I get my cash?
As mentioned earlier, contrary to the myths, pawn shops don\’t sell the item outright. When you take out a pawn loan, you are just giving your article up for a month (or whatever tenure of loan you and the pawn shop agree on).
After this \’waiting period,\’ on the maturity date, if you successfully pay the amount back to the pawn shop, you get your item back with a little additional interest.
During the waiting period, pawn shops keep your item safe and in the best condition possible. Since they cannot sell the articles during this period, you do not need to worry about your things.
How long do pawn shops hold items before selling them?
The waiting period for pawn shop loans varies from shop to shop. However, generally, this time is a minimum of 30 days for a pawn shop in Seattle. During this month, the shops \’wait\’ with the item and keep it safe.
Even though many people believe that pawn shops rip their customers off, they encourage you to pay off the loan and take your items with you. For that, many pawn shops even willingly offer an extended grace period for you to be able to pay off the loan.
Why do pawn shops have to wait before selling items?
Usually, pawn shops wait before selling items because they are legally obligated to do so. The concept of waiting periods in pawning exists to stop thieves from selling stolen items without any consequences. Pawnbrokers make sure that the thing is in the shop for at least 30 days before selling it so that they can cooperate when police require them to.
Such concerns of pawn shops also motivate them to verify their customers during a pawn transaction. That\’s why pawn shop owners check their customers\’ government IDs while giving them a pawn loan.
Are pawn shops regulated?
Yes, pawn shops are heavily regulated under state laws. Because of the strict regulations, pawn shops strictly follow the waiting time rule and avoid any misconduct. Complaints on a pawn shop\’s misconduct can land them into serious trouble.
Pawn shops are like any other business that values their customer. State laws also regulate pawn shops.
From time to time, pawn shops provide money to their customers in exchange for vehicles, jewelry, musical instruments, and much more and prove themselves to be one of the best ways to get access to some fast cash in a situation of dire need. At the same time, the concept of \’waiting period\’ ensures you have a chance to retain your precious belongings.