The Definition of Pawn
to deposit as security, as for money borrowed, especially with a pawnbroker: He raised the money by pawning his watch.
Plano Pawn Shop defines a pawn as a collateral based loan. Pretty simple. In order to borrow money, a piece of collateral is pledged. If the loan is paid back by a predetermined time, then the collateral is returned. If the deadline passes and the borrower is unable to repay the loan, then the loan defaults and the collateral is lost.
How to Value a Pawn
Your nearest pawn shop will evaluate your item and determine what it is worth to them as a business. Once that value has been established the pawnbroker will offer you an amount lower than that predetermined value.
Why is it lower? In case the loan defaults. The pawn shop needs to sell the item for a profit in order to make money on the loan.
The best case scenario is that the borrow returns and repays the pawnbroker the amount loaned with interest.
Pawn Loan Interest Rates
Who sets the interest rates for a pawn? Pawnshops laws defer from state to state. You need to determine if there is a governing body for pawnbrokers in your state.
Plano Pawn Shop, and all pawn shops in the state of Texas, are governed by the Office of Consumer Credit Commissioner. The OCCC sets and regulates the interest rates that a pawn shop can charge on a pawn.
As you can see from the chart below, the rates are comparable and actually less expensive than other options that might be available to some.
Be sure to look around our site for more information and answers to pawn shop frequently asked questions.
Or feel free to give us a call at 972-424-6911.