Unlike a bank, finance company, or credit union a pawn shop does not require a credit check. The collateral in which you pledge to the broker for the term of the loan makes a credit check unneeded. The pawn shop assesses the value of your item and holds the item for 30, 60 or 90 days if you do not pay the loan off you will get a registered letter in the mail advising you that your loan is in default and your item is them sold by the Pawnshop.
How Much is the Interest in a Pawnshop
Laws vary from state to state concerning the amount a pawnshop can charge, The state of Kentucky access’s a monthly limit of 21% per month. The interest rate varies from state to state. The rate may sound high but Pay Day Loan Companies advertise on their websites of a rate of 560%!.
The value that a pawn shop places on your collateral usually is 10% of retail . A $5000.00 diamond ring will usually get you about a 500 to 1000 pawn loan.