5 Pawn Shop Myths Debunked

While pawn shops have become the easiest go-to place for many for quick cash, its reputation for some hasn’t always been this good. Pawnshops can be depicted as shady and aren’t regulated by the government. The fact is, none of those myths are true. Pawnshops are strictly following many government laws and regulations, such as the IRS Form 8300, the FTC Safeguards Rule, the Truth in Lending Act, and many others. 

In reality, pawnshops can be a great help to us, especially when we need money fast. So, it is time to debunk the top 5 pawn shop myths.

• Pawnshops are loan sharks that charge high-interest rates

This is a big misconception that originated from unrealistic tv shows and movies. Being regulated by the government, pawnshops’ interest rates depend on the state, city, or municipality where the pawnshop is located. Interest rates can be as low as 2% up to 20%.

• Pawnshops require monthly payments

Most pawnshops have a 3 to 4 months period for a pawn loan. This means that you are not required to pay monthly payments for the loan you took. You just have to pay the fee and the interest that has accrued on your loan. You can also renew your loan after 3 or 4 months if you still don’t have enough money to redeem your pawned item. 

• Pawnshops buy and sell stolen items

This is a huge misconception and very unfair on the part of licensed pawn shops. Reputable pawnshops will never make transactions to anyone without a valid ID and necessary documents related to the items to buy or sell. In fact, pawnshops play an essential role in helping the authorities recover stolen items since they forward details about the items sold to them, such as the item’s serial number for inspection. 

• Pawnshops will take advantage of you

The market value of valuable items is always fluctuating. You can expect that you will be explained in detail the value of your item and will offer you the best resale price. Many smart buyers would visit pawn shops to purchase used items because they offer the most reasonable price. Apart from that, pawn shops would prefer their customers to redeem the items pawned to them to build better relationships with their customers. 

• Pawnshops are dirty and scary

If you haven’t been to a pawn shop before, then you might believe this misconception. However, in reality, pawn shops are equipped with the latest technology and equipment to ensure that the items pawned and on display are in tiptop condition. Moreover, pawn shops are also subject to routine checkups by the authorities to ensure that they abide by the law. 

It is easy to believe the hearsays you heard over time. However, pawn shops aren’t the antagonist in the story. They can be of great help to you, especially if you need fast cash and your credit reputation isn’t impressive. Contact Pawn USA in Woodbridge, VA, for more information! (703) 878-3000