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FAQ about Pawn Shops and Pawn Brokers

Pawn shops are places that offer you some quick cash in exchange for a collateral product. People over the years have begun using pawn shops more frequently. Still, there are some people who are skeptic about pawn brokers and pawn shops.

So, here are we are going to answer some of the most frequently asked questions about pawn shops.

What price will I get for my item?

This is a tricky question as there is no concrete answer for it. Let us assume that the value of your item is 100 pounds and you are taking it to some pawnbrokers London.

He might not value that item at 100 pounds rather he will give his value of around 50-60 pounds for that item. This is done in order to protect the lender in case the borrower defaults on his loans.

What types of items are pawned?

This usually varies from amongst pawn brokers. Usually, all of them accept jewelry, cars, properties and gold. Now days, these pawn shops are accepting high end electronic goods like iPads, Laptops, iPods and Mobile Phones as they have demand when resold.

Some pawn shops in the United States also accept firearms and guns as collateral but that type of practice is banned and hence not accepted by pawnbrokers London.

What is the interest rate?

This too differs from one pawn shop to another. But, generally, as a rule of thumb, the interest rate will be quite high and you cannot expect bank-like interest rates from these people.

Usually, interest rates within the range of 8-15 are charged by pawn shops so be aware of that.

What is the time period before which I should redeem my item?

This usually depends on the negotiations between the customer and the broker.

If you are confident that you can repay for the item when your next salary cheque comes in, go for the 30 day plan. Usually, shorter the payback period, lower the interest will be. But, if you fail to pay for your item within time, there is a very good chance that you might lose it forever. So, keep that in mind while agreeing upon the payback period.

Are pawn shops better than other alternatives?

Pawn shops are better than other similar alternatives like payday loans and taking cash advance on your credit cards. But, they are not better than the traditional alternatives like a bank loan.

So, think wisely and make the correct choice.