Q: How do I get a loan from a pawn shop?
Pawnshops and pawnbroking have been around for thousands of years. The basic idea behind any pawnshop is to loan money. A pawn is another term for a collateral loan. Pawnbrokers lend money on items of value ranging from gold and diamond jewelry, musical instruments, televisions, electronics, tools, household items, firearms, and more. Some pawn shops may specialize in certain items. Loans are based on the value of the collateral. When a customer pays back the loan, their merchandise is returned to them. A customer may also choose to surrender his or her collateral as payment in full. Pawn shops may offer extensions/renewals (where permitted by state law).
It goes like this:
- You bring in something you own and give it to the pawnbroker as collateral for a loan (this is called pawning).
- The pawnbroker loans you money against that collateral.
- When you repay the loan plus the interest, you get your collateral back.
- If you don’t repay the loan, the pawnbroker keeps the collateral.
Q: Why would someone go to a pawnbroker to get a loan?
Pawnbrokers offer the consumer a quick, convenient and confidential way to borrow money. A short-term cash need can be met with no credit check or legal consequences if the loan is not repaid. Pawnbroking imposes a discipline on the borrower that other lenders do not. Pawn loans do not cause people to overextend credit or go into bankruptcy.
Q: How much should I expect for a loan on my item?
Loan amounts vary according to the value of the item. There is no minimum dollar amount allowed on a pawn transaction but the maximum amount may be set by state pawn laws. Your loan amount will be determined according to other factors as well such as demand and condition of the item. Not all pawn stores are the same and price will vary.
Q: How do you determine the value of the item?
Pawn shops base the value of the item on current appraised value, its current condition and the ability to sell the item. Pawnbrokers use research tools that they have at their disposal to determine an item’s value and get you the most money for the item. The appraisal process varies depending on the type of item—for example, jewelry is evaluated differently than a DVD player. All items that pawn shops buy or pawn are tested to ensure that they work properly.
Q: Are pawnshops regulated?
Yes, Pawnbrokers are governed by all of the major federal laws that apply to entities designed as financial institutions. The federal laws that regulate the pawn industry are Patriot Act, Truth in Lending Act, Equal Credit Opportunity Act, as well as Data Privacy and Safeguard of consumer information as part of the Federal Trade Commission (FTC) Rules. Pawn shops that deal in firearms are regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Pawn shops may also be Federal Firearms License holders. States have regulated the pawn industry for decades, and most pawnbrokers are licensed and regulated by local authorities as well.
Q: Do most pawn customers lose their merchandise?
On average, about 80 percent of all pawn loans are repaid. Repeat customers make up a majority of the business, similar to any other lending or retail establishment. Pawnbrokers establish relationships with their customers because they often borrow against the same items repeatedly. Pawnbrokers offer non-recourse loans, looking only to the item being pledged to recover their investment if the borrower chooses not to repay the loan.
Q: Are pawn loan rates expensive?
No. To provide their service, all lenders must charge rates commensurate with the size and duration of the loan, collateral, risk and recourse. Pawn transactions are smaller-dollar, short-term loans with no hidden charges.
Q: How do I choose a pawn shop?
If you’re considering a loan from a pawn shop, follow these helpful tips:
- Do your research: Do some online research to see what others have said about working with area pawn shops.
- Know the value: of the item in its existing condition before you make a purchase.
- Negotiate: Pawn store owners are resellers, not collectors. Set a minimum price ahead of time so you don’t make a quick decision you’ll regret later.
- Know if you want to pawn or sell: Pawn shops may give you the choice. The decision should be based on a number of things including your ability to repay a loan and the value you place on the item you are pawning or selling.
- Bring items in good condition: Polish jewelry and dust or clean the items you are looking to pawn in order to help make them more attractive to the shop.
- Shop around: When possible, visit more than one pawn shop to find the lowest interest rate for a loan or the best price for your item.
- Compare interest rates: Interest rates and fees on loans are capped or limited in practically every state. Generally, you can expect to pay anywhere from 3 to 25 percent in interest on your loan.
- Ask about extensions: If you can’t pay back your loan in time, ask the pawn shop for a time extension, but be prepared to pay more fees and interest.
- Get an appraisal: For items that may be valuable, consider getting a professional appraisal. You will have to pay for the appraisal, but you will gain important information.
- Choose a reputable pawn shop: Talk to the shop staff and broker first. You should feel comfortable with them before doing business.
Q: How much do you pay for gold?
We pay top dollar equal to a high ratio related to the spot gold price every day. If you would like a free verbal gold appraisal, please call us ator email us using the “Ask Joyce” form above. You can also send us a picture by adding it to your email. We’ll get back to you within 24 hours!
Q: What is a Pennyweight?
20 pennyweights are equal to one (1) ounce.
Q: What is a Spot Price?
A spot price is the market price for immediate delivery of a commodity, such as gold, silver or platinum. This is the price gold is trading at for the day.
Q: Do you pay for gemstones?
We do buy and pay for some gemstones. We also buy diamonds and will gladly accept them.
Q: What kind of gold or jewelry will you accept?
We buy gold, silver, gold coins, silver coins, jewelry, estate jewelry, diamonds, watches, and anything of value, and guarantee we’ll pay you in INSTANT CASH.
Q: I’m looking for a particular item…how do I know you if you have it?
We have an extensive inventory of gold and silver jewelry, coins, and other collectables, and we get new items in daily. Call us ator email us and we’ll help you find the item you’re looking for. Make sure you include a detailed description and a photo with your email. Use the email from at the top of this page. We’ll get back to you within 24 hours!
Check back often . . . You’ll be glad you did!
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Gold Star Jewelry and Coin Company is open Monday through Saturday 10:00 AM until 6:00 PM. We’re located at 7048 N. Clark Street, Chicago IL 60626; Phone: 773.942.6556.