How Pawnshops Work

A pawnbroker makes loans on personal property left as collateral. The property can be redeemed when the loan plus interest is repaid.

The interest rates for pawnshops, may range from 5% to 7% a month. Loans can usually be renewed, but only if the interest for the original period has been paid.

Pawnbrokers will accept a variety of personal property as collateral. Aside from jewelry items and appliances, most pawnshops accept electronic gadgets such as mobile phone, digicam, videocam, magic sing, and the like. Inquire from the pawnshop nearest you for the other items accepted for pawning. Pawnshops won't lend more money than they think they can get if the pledged item is not redeemed and has to be sold. They would need to test the item you submit so that they can give you the proper appraisal value for your item.

When a pledged item is not redeemed, brokers are required to notify pawners that the loan period has expired and to give them a final opportunity to redeem their personal property before the broker has the right to sell the item. Foreclosed items are offered for public auction. The auction schedules are published in various tabloid newspapers. To avoid foreclosure, you need to renew or redeem your item on or before the expiry date.

If, for some reason, you lost your pawnticket, you can still renew or redeem your item by immediately informing your branch of the loss so that they can prevent redemption by unscrupulous individuals. During renewal or redemption, you need to present a notarized affidavit of loss and valid IDs.

source: http://www.about-the-web.com, photo from http://howstuffworks.com