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Introduction To Pawning

When times are tough and your finances are getting the best of you, there is a way to help make ends meet. Pawning has been used since the 15th century as a way to get a cash loan against an item of greater value. This system allows for financial stability without high risks or consequences. Today, the pawn industry is regulated almost as much as financial institutions but is more streamlined and accomodating in comparison. This article is to inform people about the pawn process and how to get a collateral loan.

Conventional banks and finance companies rely on credit worthiness, employment, personal income tax history and a variety of other factors before you are qualified for a loan. If any of these conditions are unsatisfactory then you may be disqualified. These institutions have interest rates that fluctuate with the market and penalties for late or lack of payment on a loan. Getting a loan this way will put your credit score at risk and cause you to possibly accumulate debt. Some people may not have good credit or even a job but still need financial help. Pawnshops provide a way for people in similar situations to make ends meet. With pawnshops, there is no credit check, you are not required to be employed, and your taxes are your business. If you are over the age of 18 and have a valid state ID or passport, you can legally conduct a pawn transaction.


Pawnshops rely on items of value for collateral to obtaining a cash loan. Acceptable items include but are not limited to jewelry, gold, silver, platinum, Rolex watches, modern electronics, tools, sporting goods, game systems, automobiles, watercraft, etc. Whether or not your item has any value will depend on the particular pawnshop. There are many shops that specialize in certain items and not all are the same. Once you know your item has value, take it to your local pawnshop so it can be properly evaluated as far as functionability and condition. When a value is agreed upon, there will be a pawn form filled out requiring personal identifying information and descriptions of the items being pawned with monetary amounts. This form is a legally binding contract between the pledgor (person pawning) and the lender for the collateral loan and all amounts discussed. Be sure to notate the active dates of the pawn because there is a certain amount of time that the contract is valid. As long as the pledged goods are in pawn, there is a service fee. In order to renew the contract for another month, the service fee must be paid and a new contract signed. When the pawn is ready to be picked up, the principal and interest is paid to the lender. These are just the basics but you can find additional information as far as laws and regulations by visiting the National Pawnbrokers Association website at

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