For our first blog, we thought it fitting to answer one of the most googled questions about pawnshops: How does a pawn shop work? Keep reading to find out!
A Brief History of Pawn Shops
Before we explain how a pawn shop works, let’s take a step back to sketch out a brief history of pawn shop.
Believe it or not, pawn shops are one of the world’s oldest institutions, with origins that can be traced back to China 2,000 to 3,000 years ago.
In the West, the legal framework for pawnbroking was laid down by Greeks and Romans. Pawn shops were extremely important during the Middle Ages, because they contributed to curbing poverty and helped families struggling to make ends meet.
To this day, pawn shops remain a useful resource for people from all walks of life who need short-term funds for anything from paying utilities to buying a last-minute gift.
How Does a Pawnshop Work?
After our leap back in time, let’s go back to our original question: how does a pawn shop work?
Pawn shops are in the business of pawnbroking. In other words, they advance loans to clients who provide goods or personal items as a collateral to secure the loan.
This is how it works:
- You bring an item to a pawn shop (for example, an electronic appliance, a music instrument, or jewelry).
- You get a loan based on the value of the item you pawned.
- A typical pawn loan has a length of 120 days, although the AJ’s Advantage gives you 150 days (five months) to pay back your loan.
- If you cannot pay back your loan, some pawn shops (like ours!) offer extensions or renewals.
- When you repay your loan, you get your item back. If you cannot repay the loan, you can choose to surrender the item as payment in full.
Notice that at AJ’s Super Pawn, we also buy items. In that case, you MAY get offered more money for your object.
More Interesting Facts About Pawnbroking
One of the benefits of pawnbroking is that it’s a system based on the value of your collateral, not on your credit rating. For this reason, pawn shops are extremely useful to borrowers who wouldn’t be able to get other types of loans.
According to some estimates, 30 million Americans use pawn shops every year, with electronics being by far the most pawned items (30.1% of the total).
Have more questions about pawn shops and pawnbroking? Head out to our FAQ section to learn more.
Looking for a Pawn Shop in Pomona or Chino, California? Contact AJ’s Super Pawn!
Looking for a dependable, trustworthy pawn shop in Southern California. Look no further than AJ’s Super Pawn.
We have locations in Pomona and Chino California. Give us a call today (Pomona: (909) 622-0334 , Chino: (909) 465 5456) or fill out the contact form to get in touch with us.