Lending stuff to a pawn shop can be an easy solution to get cash quickly. But for those who are not careful, this construction can be quite expensive. It can sometimes happen: acute lack of money, because you get a high bill or the washing machine breaks down. You can try to take out a loan from the bank, but sometimes this is not possible or it takes too much time. In that case you can choose to pawn some valuable items, such as a watch, television or a DVD player.
Lending Stuff to a Pawn Shop
It can sometimes happen: acute lack of money, because you get a high bill or the washing machine breaks down. You can try to take out a loan from the bank, but sometimes this is not possible or it takes too much time. In that case you can choose to pawn some valuable items, such as a watch, television or a DVD player.
You then take your things to a pawn shop. Then its value is determined and you hear how much interest you must pay on the loan and when you must repay the principal. The object serves as collateral, so there is no creditworthiness test.
If you agree and you have validated yourself, you will receive the agreed amount of money and an agreement. If you have paid back the amount and the interest on time, you will receive your items back. If you do not pay back on time, the pawnshop will become the owner and can resell the items. You will need to choose a Pawn shop that accepts gold.
Lots of choice
There are two types of pawnshops: two municipal and over sixty private pawnshops, spread all over the country. There are also organizations that specialize, for example in the pledge of motor vehicles or gold. The strong rise of private pawnshops gives you a lot of choice. It is worthwhile to shop at different pawnshops as the differences are large.
Large Interest Rate Differentials
For example, the interest can vary from 5 percent to 20 percent. Make sure that this percentage applies per month or per year, because it differs per pawnshop. For example, at the goldsmith shop you pay 1.05 percent per month (plus a one-off 1 percent appraisal fee), while a pawnshop charges 15 percent per month for ordinary goods.
Another point of attention is the period in which you give your things as collateral. This varies from one to nine months. If you expect to be able to repay the loan quickly, a short period of time is not a problem, but if you have financial problems, it is best to opt for a pawnshop where your belongings can be borrowed for a longer period of time.
You can extend the loan period (once) at most pawnshops. However, this does not apply everywhere, so inquire about this before handing in your watch. Notify in good time that you are making use of the extension option; otherwise you still run the risk that your things will be sold.
Of course you want to get your belongings back intact. That is why it is very important that they are stored safely. Also inquire whether the stored goods are insured. At some pawnshops this happens automatically; with other organizations you have to take out insurance yourself and you will only receive a small compensation in case of damage.