While pawn loans are an effective way to get cash quickly, it’s important to be aware of the overall process.
With a clear understanding of every step of the process, you’ll not only land the best deal but also avoid common pitfalls, delays, and complications. Your overall experience will be much less stressful!
So, in this guide, we’ll share the stepwise process to secure a successful pawn loan!
1. Understand pawn loans
Before visiting a pawn shop, get clarity about how pawn loan works. This way, you know what to expect from the transaction.
In pawn loans, you offer valuable collateral and get a loan against it based on appraisal.
The amount of the loan is generally a percentage of its market/appraised value. This value also fluctuates depending on factors such as conditions and market demands. It’s never the exact amount you might get for selling.
You must repay the loan within the period in the contract to recover the item. Otherwise, they’ll sell your item to cover the loan amount.
2. Identify the item to pawn
Find which items you want to pawn. Remember, you can borrow more against more valuable items and multiple items. Some common options are:
- Jewellery
- Loose precious metal/stones
- Coins
- Electronics
- Musical instruments
- Power tools
- Luxury watches, bags
- Collectibles
Make sure you choose items that are in their best condition, functional, and have a high market demand.
3. Maximize the item value
Pawn shops won’t clean your items before appraisal. They usually estimate the price of the goods as they are brought in. To get the best out of the items you want to pawn, make them presentable. This will enhance the perceived value of your item.
So, assess it closely and use a magnifying glass if necessary. Get rid of all dirt and grime. If it needs a slight polishing, invest in that. If you added any personal accessories to it, remove them.
Some items require documents of ownership, such as the actual receipt, a title/registration certificate, or even an authenticity certificate. If possible, find it and share the original or a copy of it with the pawn shop. This will enhance the item value further.
4. Learn its current value
This step is a little time-consuming, but it’ll help you know the best price for your item. You can also set realistic expectations for the loan value.
Research the value of the item to be pawned. Check the price of similar items on online marketplaces, auction websites, or retail platforms. If it’s jewellery or precious metal/stones, you can even seek a jeweller to assess its actual value.
However, don’t expect the pawn shop to offer you the exact price. It’ll only be a fraction of the market rates.
5. Find the best pawn shop
To get the best pawn loans in Auckland, New Zealand, look up and research all pawn shops online.
Visit their website and ensure they have decades of experience and are licensed by The Licensing Authority of Secondhand Dealers & Pawnbrokers.
They must have many testimonies on the website and positive customer reviews on their Google My Business page. Check that they accept assets that you want to pawn. Ensure the shop offers fair and transparent pricing, interest, and other fees.
6. Visit the shop and negotiate
Call/email the shop and get an appointment. Take your assets, the original packaging (if any), manuals, certificates, ownership documents, and any valid identification form. Ask if you need to carry any other documents and visit.
Let them assess your item and offer you an estimate. They may ask you about the functionality and history of the item.
They’ll offer you a value accordingly. If you’re not satisfied with the evaluations, you can try negotiating. However, be polite and don’t push them too much. Otherwise, they may refuse to negotiate completely.
7. Agree to loan terms
Study the loan agreement, including the amount lent, interest rates, fees, and repayment duration. If you’re not satisfied, you can negotiate for better terms.
Discuss different repayment plans and ask them to explain all terms and conditions to avoid getting penalties.
Ensure they offer a pledge ticket for your item, which is a must according to the Secondhand Dealers and Pawnbrokers Act 2004.
Once you’re satisfied, sign the agreement and get your instant cash!
Conclusion
The secret behind successfully securing a pawn loan is being well-informed and prepared. With these clear steps, you can grab the best possible deal for your assets and enjoy a stress-free experience!
