Pawn Shops Online

There are two ways to use the internet if you’re seeking to get a short term cash loan against a personal item.

  • Search online for a pawnshop near your home
  • Pawn your item online

It’s easy to search for pawn shops in your area by using internet searches.  If you’re in Chicago, just type in pawn shops in Chicago into Google, Yahoo or any of the other search engines and you’ll receive a comprehensive listing of pawn shops in the Chicago area.

Often, you can buy an item from pawn shops online. The advantage is that it may be less expensive than the item would cost elsewhere. Other firms offering online pawning services might work like this:

  • You complete an online form detaining your name, address, email, etc.
  • Describe what you trying to pawn
  • Suggest how much cash you’re seeking
  • The company sends you a Fed Ex envelope to ship the item in
  • They receive the item and place it in secure vaults
  • They deposit the money in your bank account
  • You pay the money back during the loan term (usually six months)
  • You receive your item back via Fed Ex.

Online pawn loans work the same way that brick and mortar ones work. If you don’t pay, the item will be resold.

The Pawnshop Process

What happens in a pawn shop? Fast, no credit check secured loans. You bring in an item that has some value—collectibles, jewelry, electronics, furs, firearms (where legal) etc.

The pawnbroker determines its value, then determines how much money he can loan against it. You decide on the term and the interest rate either using state regulations or the pawnbroker’s business practices. You receive the cash. The pawnbroker will store the item until you come to reclaim it.

When you reclaim it, you will pay back the amount loaned to you plus interest. For example, if you borrow $80 (the average pawn shop loan amount) at 10% per month and keep the money for 30 days, you’ll have to pay back $88 at the end of the term. If you can’t pay the money back, you can do one of the following:

  • Extend the term of the loan (if allowed by regulations and the pawnbroker)
  • Leave the item in the pawn shop for resale

Some of the advantages of going to a pawn shop for a short term loan are:

  • There’s no credit check
  • The debt spiral is avoided since the loan is collateralized
  • It’s a fast and convenient way to obtain cash
  • You’ll learn the real value of what you’re trying to sell
  • If the loan isn’t repaid, you will not be reported to a credit bureau

Determining the Value of Your Item

Pawnbrokers have many ways to determine the worth of what you want to pawn. Experience, online research, expert opinion, pawnbroker experience, market demand and even a pawnbroker’s sixth sense all come into play. Also, a thorough visual examination of the item plus a test to see if it’s operational (if that’s the nature of the item) can determine the worth of the item.

For example, a customer brought in an ivory tusk into a pawn shop that the owner was told was the real thing. However, a cursory examination of the item by the pawnbroker indicated it was not. The most important factor being that if it were a genuine ivory tusk, it would be in one piece. The pawnbroker pointed out that the piece, while beautiful, had seams, suggesting it was molded together.

Loan Amount

The value of your item is different than the amount that will be loaned to you. A general rule of thumb is that you’ll be given about ½ or less what the item is appraised to be worth. So, if a gold ring will sell for $200 to a place that will melt it down, a pawnbroker may give you $80 to $100 for it.

Customers

The average customer who uses a pawn shop for short term loans is 36 years old; 82% of them have a high school education; 33% own their own home and 80% are employed. The average loan is for $80 and about 80% of the pawned items are recovered.  About $30 million worth of short term loans are provided to consumers each year from pawnbrokers.

Other Operations

Many pawn shops have different sidelines they operate to generate additional revenue for their business. A pawnshop may also provide other financial services for the community. For example, they could provide check cashing for a fee, auto or title loans, payday loans and other currency exchange type services.

Photo by .Larry Page