Quick Guide to how pawnbrokers work

Need cash quick? No matter how well you can plan your life, things can happen that you aren’t fully prepared for. Where would you get the money to take care of those unexpected bills, the attic is a great place to start. Your attic or basement may be full of things you don’t use anymore. Your bedroom might also have things you don’t wear anymore including your gold jewellery. Instead of letting these things gather more dust and create more clutter for you get rid of them. The smartest way of doing it is to get rid of your unwanted items and getting cash for it. You can do that by taking all those valuable items to a pawnshop.


Pawnshops have gotten a bad reputation over the years but they are a genuine way of making money from things you gave no use for. Don’t be embarrassed about going to a pawnshop most of the bad things you have heard about them aren’t exactly true.


There is nothing shady about pawnshops and they aren’t as dirty or scary as they are portrayed in the media. Pawnshops aren’t the shady, scary places they often appear to be in the media. Most are regulated by government statutes and other local laws. Most are not dank, dark places but clean, brightly lit spaces run by people who take customer service seriously.  


How Do They Work


Pawnbrokers Brisbane accept valuable items from customers looking for a loan as collateral. If the pawnbroker is interested in your items, he or she will offer you a loan. Your items will; be held at the pawnshop until you pay the loan back. The loan amount will only be a fraction of the market value of the item.


You can also sell your items but loans offer more profit for pawnbrokers Brisbane which is why they would rather give you a loan than buy something from you.


The pawnbroker will give you a pawn receipt/ ticket which summarizes the loan terms, fees, description of your items, expiration date of your loan, etc. It is important that you keep this in a safe place so you can produce it when redeeming your items.


Repaying the loan


There are basically two ways you can repay the loan.

·         Come back to pay the outstanding balance with all the fees before the deadline is reached.


·         Don’t return for your items and the pawnbroker gets to keep the items for himself. Besides losing your item, there is no other action that will be taken against. You will not be reported to a credit bureau, no one will send collection agents after you – no consequences. According to NSW Pawnbrokers Association, about 80% of the people who pawn their good return to reclaim them.  


Some pawnbrokers will allow you to extend the repayment period but this always comes with additional interest charges.


The Interest-rate


Pawnshops can charge anything from 5% to 25% interest a month. In some places, the interest rate is capped. If they can’t get you with interest rates, pawnbrokers will get you with additional charges like a 20% monthly service charge. So, when signing your loan agreement you should read the contract fully, even the fine print. When in doubt ask.


The bottom line: Make sure you know what you are getting yourself in freelancing. the pawnbroker should also take the time to explain the contact and the fees to you before you sign.

Author's Notes/Comments: 

Pawnshops can charge anything from 5% to 25% interest a month.

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