If you're considering a loan from a pawn shop, the Better Business Bureau has the following tips:
Do your research. Do some online research to see what others have said about working with area pawn shops. Then, choose a reputable shop and broker you feel comfortable with. To research pawn shops in the area visit www.bbb.org
Know the value of the item in its existing condition before you make a purchase.
Negotiate. Pawn store owners are resellers, not collectors. Set a minimum price ahead of time so you don’t make a quick decision you’ll regret later.
Know if you want to pawn or sell. Pawn shops may give you the choice. The decision should be based on a number of things including your ability to repay a loan and the value you place on the item you are pawning or selling.
Bring items in good condition. Polish jewelry and dust or clean the items you are looking to pawn in order to help make them more attractive to the shop.
Consumer experts also offer the following advice:
Shop around. When possible, visit more than one pawn shop to find the lowest interest rate for a loan or the best price for your item.
Compare interest rates. Interest rates and fees on loans are capped or limited in practically every state. Generally, you can expect to pay anywhere from 3 to 25 percent in interest on your loan.
Ask about extensions. If you can't pay back your loan in time, ask the pawn shop for a time extension, but be prepared to pay more fees and interest.
Get an appraisal. For items that may be valuable, consider getting a professional appraisal. You will have to pay for the appraisal, but you will gain important information.
When using an online service, be sure to understand the terms and conditions. Make sure the package will be insured and take photos of your items before sending.
