Use a Pawnshop to Raise Money

Do you need a quick, short-term loan? Do you have several knick-knacks and gadgets, jewelry or tools that other people might value? Here's how to cash in on the "equity" you've got when you're in a pinch. Pawnshops are run by pawnbrokers who make loans using a customer's personal property as collateral. You can find one near you by referring yellow pages.

Steps

 * 1) Decide how much money you need to raise. By having a certain amount in mind, it helps the pawnbroker get you the amount you need.
 * 2) Test and clean the item. Looking around the garage and picking up something that hasn't been used for years and is covered in dust or grease will only make the pawnbroker's job more difficult.  If it looks like you don't care about or value the item, the pawnbroker certainly won't place much value on it, either.
 * 3) Call the pawnbroker to be sure it is an item he is interested in taking. Some pawnbrokers no longer take guns, VHS tapes, VCRs or car stereos.
 * 4) Make sure the item is complete. TVs without remote controls, tool sets missing pieces, video cameras without cords and chargers are far less valuable than complete items.
 * 5) Have adequate ID. No reputable pawnbroker will accept an item without proper identification.
 * 6) Ask about the terms & conditions, and the contract period for holding the goods.
 * 7) Negotiate the price. The pawnbroker has to take in items cheaply so they can turn around and sell them at a bargain price and still make money.  Sometimes the amount offered can be boosted a little, particularly if the item is easy to resell. Saying to the pawnbroker, "I need to get as much as I can," is not very helpful.  It is better to say, "I need $44.53 to cover my utility bill."
 * 8) Keep your pawn ticket. Some pawnbrokers charge a fee for lost tickets.
 * 9) Mark the due date on the calendar.
 * 10) Pick your item up well before the due date. Don't wait until the last minute to redeem items you cherish. Invariably, things happen at the last minute that may cause you to lose your items.  Traffic, job responsibilities, illness, transportation problems, any unforeseen difficulty may cause you to be late.  The pawnbroker has to sell items that are not redeemed on time.

Tips

 * If you have an unusual item or collectible, it may be helpful to have a manual and maybe something that would indicate its value. A print out from an Ebay sale, appraisal, or even a sales catalog would be helpful.
 * Establish a relationship with a pawnbroker. If he knows you take care of your property, pick up your loans on time, and are generally in a good mood, he may be more generous with his loans.  If you take him broken, dirty items, fake jewelry, and try to hurry him, he will not see you as a valuable customer.  The pawnbroker has to test everything that comes into his shop.  Pawnshops are not repair shops and broken items have little or no value.
 * Pawnbrokers have to consider that you may not come back to get the item. You may leave town, win the lottery, have other obligations and will default (don't pay on time)on the item.  This uncertainty forces him to hold down the amount he loans on items in the event he has to resell it to recoup his investment.  Most people return to redeem their pawned items, but if you look around his store, you will see that most of the things he has for sale are things people promised to come back to redeem but failed to do so.
 * Sometimes if you are unable to redeem the item by the due date, you may be able to extend the loan by paying the interest.
 * Even if you default on something, it is still OK to do business with that pawnbroker.
 * Keep in mind: pawnshops are often a great place to pick up bargains on unredeemed goods. If you don't mind used jewelry, video games and movies, it is hard to beat the prices at pawnshops.

Warnings

 * If you don't pay for a loan on time, don't be surprised to see your property for sale because it is now the pawnbroker's property. You may be able to negotiate a good price to buy it back, but the pawnbroker is under no obligation to hold it for you.  If you have already defaulted on the loan, the pawnbroker has to assume you are no longer interested in the item.
 * In most states the customer has up to 90 days to come back and pick up their personal property by paying for the amount of the loan plus any interest and fees. The interest and fees are different in each state.  A general rule of thumb would be $20 per hundred for loans.  For tiny loans (like $5.00) the fees could be as much as the loan.  The labor involved in a $5.00 transaction for the pawnbroker is as much work as a $200.00 loan.  The national average for loans is between $40 and $50.  Every transaction requires proper identification and in most cities the pawnshops are required to report daily to the local police department the serial numbers and descriptions of every item pawned or purchased.  This makes the neighborhood pawnshop a poor choice for burglars as a place to sell their stolen items.  The few stolen items taken in by pawnbrokers are often noted by the police and can eventually be returned to the rightful owner.  Since pawnbrokers require identification it is not hard for the police to track down the burglar.  Many of the stolen items turn out to be adult children stealing tools or jewelry from their parents or roommates borrowing against a guitar that doesn't belong to them.  The percentage of stolen items is less than 1 percent.  Most pawnshop users are honest,hard working middle class folks who are just trying to get through until the next payday.
 * Don't attempt to sell stolen items to a pawn shop. Electronics have special serial numbers (sometimes hidden) that pawn shops run. If the item comes back as stolen, you are in BIG trouble. Remember, the broker does have your I.D. info!

Things You'll Need

 * Proper identification.
 * Good attitude
 * Personal property with resale value.

Related Tips and Steps

 * How to Get Out of Debt
 * How to Buy Nothing
 * How to Find a Good Home Equity Loan Lender
 * How to Lower Your Monthly Bills
 * How to Avoid the 7 Deadly Sins of Selling