While many people sell to pawn shops for a quick infusion of money, others use the transaction as a loan instead. This loan consists of using your asset as collateral and repaying the borrowed money in a set period of time, resulting in getting back your stuff.
When handled as a loan, pawning items can make use of the value of your goods — perhaps more than once — while still keeping your treasured item for yourself. It is, in effect, freeing up its financial potential. But doing so requires that you take five steps to ensure you get pawned items back. Here are these steps.
1. Understand the Contract
First, read the pawn agreement thoroughly and make sure you ask questions so as to understand it. Discuss the terms with the pawn shop employee so you get additional confirmation that you understand what's expected and exactly when.
2. Protect Your Ticket
The pawn ticket is your key to retrieving each pawned item, so protect it like you would a lottery ticket. Keep it handy in case you need to produce it if you speak with the pawn shop, but don't let it get into the hands of your kids, your pet, or an overeager house cleaner.
3. Save Regularly
Most pawn agreements only require final payment on or before the expiration date. This can be beneficial, but it means you'll need to set aside money on your own to ensure you can make that payment. Failure to save throughout the repayment period is one of the biggest dangers. Set aside regular, untouchable amounts daily or weekly. And if possible, use an automatic banking transaction to do so.
4. Discuss Concerns
If you are nearing the pawn expiration date and you may not be able to pay back the loan, take the initiative to talk with the pawn shop. You may be able to extend the loan or receive more favorable terms in an emergency. If you wait until the expiration date arrives or passes, though, the situation may not be salvageable.
5. Don't Miss the Expiration Date
The expiration date is when your full payment is due. Make note of this date on your phone, your home calendar, your work planner, and wherever you store the ticket. Have a friend or family member remind you a week before the date. Whatever you must to do keep this deadline in mind, do it. And return to pick up your things at least a day in advance to be safe.
If you follow these five steps, you'll have a successful pawn loan experience. And now that you have the process down to a science, you'll be able to unlock more of the potential in your assets.
For more tips, reach out to local pawn shops.