Well, people who have never been to a pawn shop earlier are exploring short-term loaning options so that they would be spared from selling their farm. Pawn shops are a good option to avail short-term cash loans. If you have a basement full of stuff and is just gathering dust, you might well consider going to a pawn shop that accepts various stuff such as musical instruments, gardening tools, music system, computer, laptop, mobile and gold and other precious jewellery. Similarly, there are auto pawn shops that solely deal with automobiles and large machinery or equipment. Usually, pawn shops will provide a fraction of the total cost of the concerned asset or automobile.
It is easy to pawn your asset and avail the cash loan and walk away; however, people without prior experience in dealing with pawn shops must know the fine points of how these transactions work, well before entering the pawn shop.
Pawn Shops Are Looked At With Wary Eyes
Pawnshops aren’t the sceptical place they are often made to appear in different media. Pawnshops have been unfairly offended by the conventional media – that’s the reason why most of the people believe pawnshops aren’t trustworthy and reliable. Whereas the truth is pawn shops in Australia are regulated by the statutes and laws of the concerned state. Most of the pawn shops are clean, professionally operated shops by people who take immense pride in offering excellent customer service.
The Process of Availing the Pawn Loan
Whether it is an ordinary pawn shop that accepts all things including gold jewellery or a specialist auto pawn shop, the process is the same. Here, we will take the example of how an auto or car pawn loan works:
You drive your car to the auto pawn shop near you. The pawnbroker will evaluate your car and offer you a loan amount (the loan offer will just be a part of the overall value of your vehicle). If you agree to the proposal, you will have to sign and complete the agreement and hand over your car keys and purchase or Rego papers and they will give you cash in your hand. Simultaneously, they will place your car into safe storage until you come back to claim it by paying the loan amount and interest.
Typically, you’ll receive a pawn ticket, which you need to keep safe, as it’s the proof that you have pawned your collateral with the pawn shop. The pawn ticket will contain terms of your loan – description of your item, the interest charged, fees and expiration date.
Loan Repayments
Repayment terms can differ from one pawn shop to another. However, reputed pawn shop in Sydney will provide you with below two options:
· You can pay everything (loan amount, interest and charges if any) at the end of the loan term.
· Alternatively, you can choose to repay in monthly instalments.
Loan Tenure
Typically, loan tenure is three months for short-term pawn loans; however, some reputed pawn shops facilitate to extend your loan by a month provided you pay up the interest in advance.
What Happens When You Fail To Repay the Loan?
When you fail to repay the loan, the pawnshop will keep your item and you’ll lose the ownership of your item. That means, your credit report won’t be affected and the pawn shop will not call you up or perform any sort of follow-ups with you for collection.
According to the National Pawnbrokers Association, 80% of all customers successfully reclaim their assets back. That means pawn loans aren’t a bad option if you have no other option left.
Final Words
When you have nowhere else to go for availing a quick cash loan, then you can turn towards pawn shops. Not only you can pawn gold jewellery or quality musical instruments that you aren’t using but also you can hock your car to get an instant cash loan for short-term. If you want a higher amount of cash loan, then probably you may have to opt for pawning your car over other assets.
