When You Need Fast Cash - Pawn Shops

What do you do when you are out of cash? You have several options like borrowing from your parents, siblings or friends, or go to the bank to take out a loan. However, there are some people who would rather go to a pawn shop. Pawn shops are where you can bring items such as jewelry, electronics, appliances, or furniture and use them as collaterals for funds that will be loaned to you. Pawnbrokers who run these establishments loan you the money for a specified period of time in exchange for the item being “pawned.” Today, there are also online pawn shops available for your convenience.

History of Pawn Shops

Pawn shops or the pawn broking trade are considered the oldest financial institutions dating back at least 3,000 years to ancient China. Subsequently, they found their way to Greek and Roman civilizations. The pawn shop trade has thrived throughout history with even royalty engaged in pawning items to raise money for wars and explorations. Pawn shops are recognizable to anyone who sees three gold balls or spheres suspended from a bar. This is the symbolic meaning of the trade.

What Happens in a Pawn Shop?

When you go to pawn shop, the pawnbroker first assesses the monetary value of the item before offering a certain amount of cash for it. If you are satisfied with the offer, which is lower than the real value of the item, you leave the item with the pawn broker so you can get the cash. A certain amount will be deducted from the funds or you might have to pay the money back with an additional amount. This serves as the interest for the loan. Pawnbrokers usually give 30 days for customers to pay back the amount loaned. Otherwise, there will be an additional interest or the item you pawned will be sold.   

Pawn Shops Go Online

Forfeited items are usually sold in the same pawn shop or online. Most of the online pawn shops sell items on eBay. These online pawn shops do not do the same business as that of an offline pawn shop. Usually they just ask people to sell scrap gold to them while some will ask you to go to an offline pawn shop where pictures of your items will be taken. These pictures are then posted online in case the item will be up for sale. An advance can be given to you if the pawn broker knows that your item can be sold immediately.