
Originally Posted by
yupstrips
Since the recent economic downturn, families and business owners are looking to pawn stores for the first time to secure safety net loans that cover unexpected financial needs. Everyday, thousands of Americans are in need of short-term, small-dollar loans that aren’t available from banks or traditional lenders. With the success of Pawn Stars on the History Channel, many Americans are discovering that modern day pawn stores are clean, well-lit businesses that serve consumers from all walks of life. Yet, many are still unclear on what pawn stores do and how pawn loans actually work.
For consumers seeking safety net loans from a trusted, licensed pawnbroker, NPA answers the following questions about pawn stores:
1. What does a pawn store do? The core of a pawn store’s business is making collateral loans. Pawn stores offer loans, secured by something of value. The pawn store may have other business elements such as retail sales. However, pawnbrokers focus on lending money.
2. How does a pawn loan work? Customers bring in an item of value, and the pawnbroker offers a loan based on a percentage of the item’s estimated value.
3. How much money can I get for my item? On average, customers receive only a portion of the item’s retail value. Remember, the pawnbroker is loaning money on the item, not buying it
4. What kind of interest rate will I have to pay on the loan? Interest rates vary from state to state and usually amount to less than bank overdraft fees, utility reconnect fees.
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