What’s a pawn loan?
A pawn loan is another name for a collateral loan. This is when money is lent in exchange for items of value, with the loan amount based on that item’s value. The item is returned when the loan is paid off, or can be surrendered as payment in full.
What is an extension?
If you’re unable to pay back your pawn loan in full on its due date, you can get an extension. With an extension you are required to pay a portion of the interest owed. Then you may extend the length of your pawn loan for as many days as allowed by state law, usually 30.
What is a renewal?
If you’re unable to pay back your pawn loan in full on its due date, you may be able to get a renewal. With a renewal, you pay the interest that has accrued on your pawn loan in full, and a new pawn loan is written. The principal pawn loan amount remains the same, as does the interest rate, but the due date is reset for the full loan term.
Is a credit check required for a pawn loan?
No. The only requirement is a valid photo ID.
What items can be pawned?
A wide variety of items can be pawned, including, but not limited to:
- Gold and diamond jewelry
- Musical instruments
- Household items
- Laptops and tablets
- Art and collectibles
- Sports, outdoor, and recreational equipment
- Gas or electric powered equipment
Can I pawn a gun?
Yes, Pawn America accepts firearms as collateral for pawn loans, as regulated by Minnesota state law. We are a registered firearms dealer and must comply with all federal regulations.
Do most Pawn America customers lose their merchandise?
On average, roughly 80% of all pawn loans are repaid. Items are only forfeited if the borrower chooses not to repay the loan. Repeat customers make up a majority of the business, similar to other lending or retail establishments. Hence, we develop relationships with our customers because they often borrow against the same items repeatedly.
Is my collateral safe while in pawn?
While your item is in pawn, you still own it. It is our responsibility to keep it safe and in good condition while it’s in our care. When you give us an item for pawn, we keep all accessories (remote controls, cables, etc.) with your item and place it in a secure area. Your item is safely stored until you return to pay your pawn loan in full and reclaim it. Pawn America is fully insured for the loan value of the collateral we keep.
How much should I expect for a loan on my item?
Loan amounts vary according to the item’s value. There is no minimum dollar amount on a pawn transaction, but the maximum amount may be set by state pawn laws. Your loan amount will be determined according to other factors as well, such as product demand and condition of the item. Not all pawn stores are the same, and prices may vary.
How is item value determined?
Pawn loan amounts are based on the item’s current appraised value, condition, and our ability to sell the item.
How do you determine the value of jewelry?
When jewelry is the collateral for a pawn loan, we test the precious metals and diamonds to determine its worth. The diamond testing includes a visual inspection using a jeweler’s loupe, weighting the item, sizing (determining carat weight of) any stones, and noting the cut/color/clarity of each. Additionally, we test the metal using a special acid that determines the karat of gold. This is done to ensure a clean test so there are no false readings on your item that may detract from what we can loan you.
How do you determine the price of gold?
The price of gold is based on market values, the price for which is routinely reviewed and updated. Prices can vary greatly as the loan amount for 24K gold is significantly higher than that of 14K gold.
Are pawn rates excessive?
No, all lenders must charge rates commensurate with the size and duration of the loan, collateral, risk, and recourse. Pawn transactions are small, short-term loans with no hidden fees.
Is Pawn America stocked with stolen merchandise?
Pawn America is one of the worst places to attempt to get rid of stolen merchandise, as we are highly regulated, work closely with local and federal law enforcement officials, and train our staff to be on the lookout for and identify stolen property. Every pawn transaction is shared with police departments nationwide. Less than 1% of items are identified as stolen goods.
Is Pawn America regulated?
Yes, we are governed by all major federal laws that apply to entities designed as financial institutions, plus local authorities. These laws include the Patriot Act, Truth in Lending Act, Equal Credit Opportunity Act, and Federal Trade Commission Rules on Data Privacy and Security transfer. Because we deal in firearms, we are also regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Do pawn customers receive the same federal law protections at Pawn America that they would at other financial institutions?
No, because pawn transactions are the only type of consumer credit that requires reporting to local law enforcement agencies. This reporting is required daily, and must include extremely sensitive, personal information about the customer, including gender, ethnicity, and address.