The 2016 poverty rate in the United States was 14% overall.
For Memphis, Tennessee, the figure was much higher, approximately 27%.
It’s no surprise, then, that pawn shops in Memphis provide a much-needed community service. About 7.4% of all US households have taken advantage of a pawn shop’s services. The figure in Memphis is probably higher.
If you are strapped for cash in Memphis, a pawn shop loan can really help out. This is especially true if you have poor credit or lack a bank account. You can use the money you get for anything, including bills, food, or even diapers.
If you’ve never visited a pawn shop before, don’t worry. In the article below, we’ll answer the question how does pawning work? That way, you’ll have the facts before you go.
How Do Pawn Shops Work?
Pawn shops offer short-term loans. To qualify, you don’t need to provide a credit rating or any financial information. The value of the loan is based only on collateral, or the value of the item you want to pawn.
Pretty much anything can be pawned, though some items like jewelry and electronics are more common than others. Loans generally run thirty days, and interest rates can be high.
Paying the loan back quickly, then, is recommended, and most people do. About 85% of pawn shop customers pay their loans back on time. This allows them to get their property back.
Unfortunately, if you cannot or do not repay the loan, the pawn shop can keep your property and sell it. Some pawn shops offer extensions, so it’s always worth asking for one if you need more time.
In the next section, let’s go over some basic tips about how to pawn.
Tips for How to Pawn
If you’re thinking of visiting a pawn shop in Memphis, keep the following three factors in mind.
1. Make Sure Your Item is Clean and Gently Used
Don’t try to pawn anything that looks old, worn-out, or is missing pieces. Your item should also be clean. Any dust or cobwebs must be cleaned off before you go to the pawn shop.
If the item is dirty or broken, the pawnbroker will assume you are trying to get rid of it. They will offer you a lower loan amount or refuse to grant you one at all.
A clean, well-taken-care-of item, on the other hand, shows the pawnbroker you are serious and intend to come back for your item after you pay off the loan.
2. Your Loan Won’t Equal the Item’s Market Value
The pawnbroker is hoping you will repay your loan (with interest) and get your item back. But if they end up selling it, they want to make a profit.
For that reason, you will never be offered a market-value price for your item. Expect to receive about 40% to 60% of its value. You should, however, feel free to negotiate because you never know!
In addition, it isn’t necessary to regale the pawnbroker with your life story. But extenuating circumstances may prompt them to offer more money. This is especially true if you have a relationship with them already.
3. Don’t Be Afraid to Ask Questions
Pawn shops are often family-owned small businesses. They work under multiple federal, state, and local regulations. Even so, read any contract before signing it, making sure you understand it thoroughly.
Feel free to run the pawn shop through the Better Business Bureau website (www.bbb.org). There you will be able to see their ratings and whether they are accredited.
Wrapping Up: How Does Pawning Work?
That’s it, then. The answer to the question how does pawning work in Memphis, Tennessee. It’s possible to pawn just about anything there, including guns, jewelry, or your old phone. All these items can give you a quick cash infusion.
You don’t have to visit every pawn shop in Memphis to see which one will offer you the best price, though. Just use our free comparison tool.
It provides you with offers from local pawn shops. Then all you have to do is take your offer to the shop and get your cash. Easy peasy!