FAQ - Frequently Asked Questions

How does a pawnshop work?

People often need to borrow small amounts of money that other lenders are not willing to provide...  This has caused the popularity of pawn shops to rise...  What chance do you think you would have getting a $500.00 or smaller loan from a financial institution for a 30 day period? The cost of the paperwork alone makes small loans like this unprofitable for them to make on a regular basis...  Pawnbrokers lend money on items of value ranging from gold and diamond jewelry to musical instruments, computers, HDTV's, tools, and various other items...  These items maintain their value over a resonable period of time and are easy to store, especially jewelry...  All customers provide collateral, eliminating the need to distinguish high risk from low risk borrowers...  Typically, loans are small, average between $50 and $100...  They can be as small as $10 - $20 or as high as several thousand dollars, depending on the value of the collateral...  The average loan period in Virginia is 30 days...  Loans can be renewed monthly...  Fees are regulated by the state...

Why would someone use a pawn shop to get a loan?

Pawnshops offer people a quick, convenient and confidential way to borrow money...  A short term cash loan can be made with no credit checks and no legal consequences if the loan is not repaid...   Pawnbrokers, also know as collateral loan brokers, make loans based on the value of the collateral...  Checking the customers credit history is not required because they are leaving their property to cover the amount of the loan...  If the loan is not paid during the specified term, the item is forfeited and may be resold by the pawnbroker to recover their costs...

What is a typical transaction like?

A typical transaction begins when a potential borrower brings in their property into the shop for a loan...  We then determine how much to loan to the customer for their item...  The amount of the loan is based on the resale value of the item, not the price of the item when it was new...  There are some items that are rather expensive new, but as a specialized item they are extremely difficult to resell, and because of that they receive a low loan value...  Also there are some items that are very popular and attract a higher price, so the loan value will be a lot closer to the new price of that item...  Loans are paid out at a rate of about 1/3 - 1/2 of the price we can expect to sell the item for...  This assures that a profit will be made if the loan is not paid back by the borrower... 

Do i need to bring an ID ?

The state requires us to use only state issued drivers licenses or state photo ID cards as identification each time a customer sells or pawns an item...  We may know you personally, but you will still need to bring your ID to complete a transaction...  A complete description of the customer and all items received by a pawnbroker must be reported to the police on a daily basis...  The police compare pawned and sold property to their burglary, robbery, and theft reports daily...  This greatly reduces the chances of a pawnshop receiving stolen property...

What if i cant pay my loan in time ?

The customer defaults on the loan when the loan is either not paid in full, or the monthly charges are not paid by the due date...  After a 15 day grace period, the collateral becomes the property of the pawn shop and can be sold... 

Do most customers lose the items they pawn ?

On average 80% of all loans are repaid...  Repeat customers make up most of our business...  We know most of our customers because they often borrow against the same items regularly...  If the borrower decides not to repay the loan, or the monthly charges, we try to recover our investment from the loan by selling the pawned item...  We prefer that customers return for their property...

How do i know the items i buy at a pawnshop is not stolen ?

Items for sale in our shop are either new or previously owned...  Everything pawned or sold to us is described in detail along with serial numbers, and the customers ID, in mandatory daily reports to the police...  Our video surveillance equipment also verifies and records customers identities...  Any property that is stolen is returned to the owner...

Can i save money buying at a pawnshop ?

Yes...  Pawnshops generally offer merchandise around 1/3 - 1/2 off retail prices...