What exactly is a pawn shop?
A pawn shop is a business that lends you money against a collateral. A collateral maybe any item of value such as gold, silver, diamond or any other precious metal. It can be used electronic items such as television, computer, laptop etc. It can also be vehicles such as motor bike, car, boat etc. You can either sell off your used items (that are working and in good condition) to gain money instantly or keep it as a collateral with the pawn shop and get the loan against it.
What is the difference between pay day loan and a pawn shop business?
Typically, pay day loans are of short term nature and you can get a pay day loan against a proof of your regular pay checks. Also, pay day loan take into consideration your credit standing (credit score). It is little tougher to get a pay day loan.
Pawn shop business works upon the simple principle that you need to deposit something of value with them, and they will loan you a sum which would be a percentage of the valued item. Pawn shop will not consider your credit score either, rather it will give instant cash loan you against your collateral. In case, you fail to repay principle amount along with interest within the fixed time, pawn shop has the authority to sell off your item that you have kept has a collateral, and gain the money.
At the time of entering into an agreement with a pawn shop, you will be given a pawn ticket in which your name, your valued item, and the loaned amount along with the interest and the duration to repay the loan will be mentioned. You can also get an extension to repay your loan amount, however, you will have to inform the pawn shop in advance and also pay additional charges for the extension.
Is pawn shop a legal business?
Yes, pawn shops are officially licensed and legally approved business, however, each state will have its own set of rules that have to be followed from time to time. To remain safe in all your dealings, always deal with licensed pawn shops or pawn brokers.
Mega Cash is a licensed Sydney based pawn broker and second hand dealer having branches in Doonside, Mount Druitt, St. Marys and Marsden QLD. If you are interested to know more, you can visit official website of Mega Cash.