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How do pawnbrokers work?

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If you’re currently going through financial difficulties, we recommend that you considering taking a loan from a pawn shop In Melbourne, pawnbrokers are willing to take your valuable items and grant you immediate cash money  – however, if you’re not familiar with the process, we advise you to keep reading.

Essentially, pawning an item consists of signing a contract, giving a particular item as collateral, and then receiving the money.  You’ll have a specified amount of time to pay for the loan, taking into consideration other factors, such as interest. If you do not pay for the item, the pawnbroker has the right to keep it.

What are the items you can pawn?

For starters, the item must be in optimal condition unless its gold jewellery which can be melted down if you default. For items such as Laptops and Ipads you will receive more money based on how good its condition is. For instance, if you want to put up an Iphone for pawn, the pawnbroker is most likely to evaluate how much useful life it has left. Unlike when it comes to gold jewellery which can just be melted down if the pawnbroker can’t sell it.

In Melbourne, pawnbrokers require a license to be able to operate, so they are trustworthy establishments. However, once the pawn is paid back and you have your jewellery back, if it had diamonds it doesn’t hurt to make sure the diamond hasn’t been swapped.

Whenever you enter a pawnbroker, you’ll see different items they accept for collateral, from electronic appliances like Laptops or Iphones, to gold jewellery or power tools. There are little limits to pawning items, so bare this in mind if you need quick cash.

Pawnbrokers will use different methods to evaluate the item, depending on what it is. Therefore, it would be best if you inspected it yourself to make sure you’re getting a good deal.

Pawnbrokers work based on interest.

As we mentioned above, in Melbourne, pawnbrokers profit based on interest their interest rates. The pawnbroker will evaluate your items value and offer you a loan based on it’s re-sell value. They will take into consideration different aspects, depending on the item you’re trying to pawn.

As for the interest rate, we cannot tell you the exact percentage. All pawnbrokers have different interest rates. However, usually they vary between 5% – 20% depending on how large of a loan you are taking out and how easy the item is to sell or turnover.

Please make sure the item you’re pawning is in optimal condition before putting it as collateral unless of course its gold jewellery

What should you do if you don’t make it to the due date?

If you happen to be delayed in making the interest payment, the pawnbroker has the right to keep the item. However, it’s a good idea to give them a quick call and ask for an extension. Otherwise you may find that your valuable item which you pledged has been sold!

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