When you need cash quickly one of the first options you might consider is pawning an item. Pawning items is a great choice. Not only are you going to get cash right when you need it, but it also won’t negatively affect your credit. But you shouldn’t go into pawning an item unaware of how the process works. One of the most common questions asked about the pawning process is what happens if you cannot or do not pay back your loan. In this article, we will discuss your options. If you have specific questions or need a loan in NYC, give us a call or contact us through our website form.
What Is Pawning?
Pawning an item is a great solution for when you need to pay for an immediate and urgent financial need. Life can often throw curveballs, and if you need cash quickly to pay for something, pawning is one of your best options. With pawning, a person just brings an item or items that will be used as collateral for the loan provided to them by the pawn shop. The loan is then determined based on the value of your item. Compared to taking a loan from a bank, a loan from a pawn shop doesn’t affect your credit and the amount of money you get is dependent on the item you bring not on your existing credit score.
What Other Options Are There Other Than Pawning?
Pawning an item isn’t your only option when you are in a pinch and need cash quickly. As mentioned above, you could potentially get a loan from a bank, however bank loans are more difficult to get. The process of getting a bank loan can take longer, have immediate affects on your credit score, and you could still not be approved. Another option would be to sell items instead of pawn them. In many cases, you might be able to sell for more money than how much you would get for pawning the same items. But you will no longer have any amount of ownership of an item once it is sold. With pawning items, you still can reclaim your items by paying off your loan. Pawning is often the best option for many people because it provides money based on the value of your items and doesn’t depend on your credit score or payment history. It is also private and won’t affect your score in the future. And most importantly, you are able to recover your items.
What Happens If I Don't Pay For My Loan From A Pawn Shop?
If you are unable or decide not to pay back a loan for a pawned item, eventually that item is forfeited to the pawn shop. When you first pawn an item the pawn shop will explain the terms of your loan including the interest and how/when to pay it all off. Communicating with your pawn shop is highly beneficial. You may be able to extend the terms of a loan by paying off part of the loan or by working things out with the pawn shop. However, if you are unable to pay off your loan by the deadline, the item will eventually be forfeited to the pawn shop and they will be able to sell it.
Can I Buy Back A Pawned Item That Was Forfeited?
This is possible and not unheard of. Some people have bought back an item that they initially pawned off and forfeited. But this is not a reliable strategy or a recommended one. It is cheaper to simply pay off your loan and interest in the timeline the pawn shop provided. There is no guarantee that an item you pawned and forfeited will not be sold before you have the funds to buy it back.
Buy, Sell, & Pawn in NYC
If you have questions about pawning items, loans, or regulations for pawn shops in the NYC area, please feel free to give us a call. We would be happy to answer specific questions about pawning items for cash at our stores in the Bronx.