Did you decide to pawn something you own of value to get a little extra cash in your pocket? Great idea! Not only will you get cash instantly, but this kind of loan won’t affect your credit score and you will have the opportunity to redeem your item when you repay the pawn loan and the shop’s small interest rate.
But what happens if you do not return to reclaim your pawned item? Keep reading to learn about your options if you forget or are unable to repay your pawn loan in time to redeem your item.
Information about Pawn Loans
Unlike banks, when you get a loan from a pawn shop, you don’t have to worry about your credit score or any past loan misconduct. Getting a loan from a pawn shop is much easier. To get a loan from a pawn shop, you will need to show a form of identification and some collateral as proof of payment. Your local broker may require proof of ownership on the item you are pawning. The pawnbroker will put a value on your item, and you’ll walk out with cash the same day. It’s that easy!
Read in more detail about loan renewals and how pawn shop loans work by clicking here!
How to Get Your Pawned Item Back
Unlike with other loans, when a pawn is due, the borrower has many options. The borrower may repay the pawn loan to retrieve the item, pay the interest to renew the loan for another 30 days and keep the account active, or choose to keep the borrowed money by not paying back the loan at all and therefore forfeit the pawned item.
Paying your loan (or the interest)
The borrower may repay the pawn loan to retrieve the item on or before the due date. If you are unable to repay the loan in full when it’s due, you may pay at least the interest on the payment due date to keep the account active and renew the loan for another 30 days. You may be charged an additional fee each time you renew based on the amount outstanding, so it is encouraged to pay the interest plus any additional amount you desire to pay towards the principal balance (or borrowed amount).
Paying late (or not paying at all)
When a customer decides that instead of repaying the borrowed money, it is in their best interest to keep the borrowed funds (or the funds may not be available to be paid back), the item is surrendered to the pawn shop and may be made available for sale in the shop. One of the most useful features of a pawn is that if circumstances demand it, a borrower can choose not to pay back the loan with no effect on their credit. Since credit is not a part of a pawn transaction, if the account becomes past due for over 30 days after the due date for example, the borrower will instead forfeit their item to be sold by the pawn shop.
What can you do if your item is forfeited?
Although it should not be relied on, it is not unheard of for a surrendered item to be repurchased later at its retail price by the person who pawned it. A surrendered item that remains available for sale may have the pawn reactivated for the interest amount due or paid out if all components of the pawn are still available.
In some cases, pawnbrokers may not always choose to sell the items that have been left from an unpaid pawn loan. In fact, most of the time it’s in a pawn shop’s best interest to keep happy pawn customers so they will return to pawn additional items if they need extra funds again in the future. Pawnbrokers know that if they sell an item that was pawned, they may only make their money back once, but if you redeem your item and need their services again, that item could create repeat business in the future.
If you have recently surrendered your item on a pawn loan, it’s in your best interest to visit the pawn shop you received the loan from and simply ask if they can extend your loan further. This will ensure they do not place your pawned item for sale. Recovery may still be possible even after the pawn’s active term has expired. Being aware of the options available during the life of your pawn transaction will create a more satisfying pawn experience!
Need some quick cash? Remember the Alamo, on Transmitter Road! We provide quick confidential loans on just about anything of value. Ask about our VIP loans for small businesses, or individuals with high net worth in need of a quick cash loan! Special rates apply to VIP loans.
* Loans are based on the value of your collateral, not your credit rating or pay schedule. A typical pawn loan has a term length of 30 days, plus a 30-day grace period. If you cannot pay back your pawn loan in full, including any applicable grace period, we offer extensions to give you extra time. You may also choose to surrender your collateral as payment in full. Please keep in mind that once you choose to surrender your item, you are giving our shop permission to place your item for sale to other customers.