When the average person hears the word ‘Pawn Shop’ these days, they probably think of the History Channel show Pawn Stars and the modern notion associated with such pawn shops. In actuality, the history of pawn shops has been around for centuries. There is evidence that pawn shops were rooted in Ancient China about 3,000 years ago.
Pawnbrokers would offer short-term credit to peasants. This trend continued and evolved until the Ancient Greeks, and Roman civilizations made the concept more mainstream. Citizens would pursue startup income to begin businesses and other business ventures. These new owners would pay back their collateral and interest once their business started making income.
What is a Pawn Shop and How Do They Work
A pawn shop or pawnbroker is a shop or business that loans money to people who bring in valuable items which they leave with the pawnbroker. The most common items a person might leave include: jewelry, gold, watches, cameras, musical instruments, televisions, power tools, or computers.
These valuables that people leave are called ‘collateral .’They are allowed to ‘pawn’ these items of value to the pawnbroker, who in turn gives them money for the items. The person can get their valuable item(s) back from the pawnbroker if they pay back the money they were loaned and pay interest on the loan.
Interest is the fee to borrow somebody’s money for a set period of time. After that set period of time, the collateral becomes the property of the pawnshop, who can do what they want with it.
Most of the time, they will simply sell the item to another customer to get back the money they loaned out. In The United States, over 80% of the collateral is re-claimed.
To prevent thieves from using pawn shops as a way to make money on stolen goods, most communities have laws requiring people who bring in their valuable items to the pawn shop to show positive identification, such as a driver’s license.
Pawn shops offer collateral loans for substantially low-interest rates. Because of this, they specialize in small short-term loans. Pawn shops can offer these types of deals because the customer provides personally owned property as collateral.
This significantly reduces the risk to the lender/broker. Secured short-term loans from pawnbrokers are highly regulated to provide some reassurance for the customer and pawn shop. All the terms of the transaction are clearly stated in a government-regulated contract.
Tim’s Trading Post and Pawn
Here at Tim’s, we offer plenty of jewelry, silver, gold, coins, bicycles, gaming systems, Rolex watches, computers, a variety of tools, one of the best selection of firearms this side of the Bay, and much more.
What sets us apart is our 10% rate on giving out loans. Yes, you read that correctly…10% on loans! The ‘other guys’ charge significantly more. No bank accounts are needed either. If you have the pleasure of visiting our shop, you will see the windows adorning the 10% tag on them.
Don’t get stuck paying a higher percentage on loans. Stop in today, meet our well-trained and personable staff, peruse our vast inventory of high-quality items, and take advantage of that 10% rate on your next loan.
If you have any questions, please contact us today. We look forward to working with you.