Visiting a pawn shop for the first time can be intimidating if you're not familiar with how they operate. There are a lot of misconceptions about pawnbrokers and loans that could lead to you missing out on their advantages. Here is a helpful guide to pawn loans and shops to ensure you understand when and why pawning is a viable option.

Your Guide to Pawn Shops

What is a pawn loan?

With pawn loans, the pawn shop lends you money and accepts one of your items as collateral. Customers receive their merchandise back when they repay the loan. Everything from jewelry to power tools can be pawned. If the customer can't repay the loan or decides not to, the shop keeps the collateral item and then resells it to the public.

Does pawning affect credit?

Your credit score, which measures your creditworthiness, will not be affected by pawn loans. Unlike a conventional loan from a bank or lender, pawn loans aren't reported to credit bureaus or affiliated with your credit history. In the event that you fail to repay your loan, the pawn shop will simply keep your item. 

When is it better to pawn than sell?

If you know you want to keep the item and are confident you can repay the loan, pawning is a great opportunity for fast cash. It’s also ideal if you’re still building your credit store. Pawn shops offer convenient interest rates. With a traditional lender, you may face a high rate because of your lower credit score or may not be able to secure a loan at all.

How is the value determined?

Shops subscribe to countless national databases to monitor the market value of items. When you bring in power tools or a piece of jewelry, they perform an appraisal and then compare it to comparable items that are currently selling or have sold. This is considered fair pricing and will dictate the loan amount that the shop will offer.

If you’re in the Roanoke, VA, area and are looking for great deals on tools for sale, electronics, furniture, and more, stop by Roanoke Pawn. This shop stocks a diverse range of products and has an ever-growing inventory. Their knowledgeable staff will help you find what you’re looking for and also offer cash for gold alongside their pawn loan services. Call (540) 362-7296 to speak with a representative, and visit their website to learn more about their pawn shop. Connect on Facebook for news and updates.