Whether you need to clear out some space by selling tools inherited from a relative or are looking for some emergency cash without paying payday loan interest rates, you may be considering getting a quote from a pawn shop. For those who have only been on the purchasing end of a pawn shop transaction, you may be wondering what to expect from your visit -- especially when it comes to the amount of cash you'll be able to receive for your items (or the interest you'll pay on a pawn loan). Read on to learn more about your pawning options, as well as the laws and regulations governing pawn shop fees in New York.
What are your options when it comes to a pawn shop transaction?
Most pawn shops offer two main choices -- pawning and selling. When you pawn an item, you'll leave it with the shop as collateral in exchange for a loan of less than the item's value. After paying back this loan (plus an additional finance charge), you'll be able to reclaim your item and can then choose whether to keep or sell it. Most New York pawn shops offer loan terms of 4 months or less. If you're unable or unwilling to repay the pawn loan, the pawn shop will keep your item and resell it after the loan term has ended.
For items that tend to hold their value well over time (like guns, tools, jewelry, and coins), you may have some luck selling to the pawn shop. Although the shop owner will need to build in a certain amount of expected profit when he or she later resells the item, you'll usually be able to fetch a competitive price -- and most importantly for those dealing with a financial emergency, a quick cash transaction. Some collector items like baseball cards, movie memorabilia, or musical instruments can also be valuable when sold at a pawn shop. On the other hand, depreciating items like motor vehicles, large items like furniture, or items that quickly become obsolete like computers and gaming systems are unlikely to be easily resold and probably won't get you the price you're seeking (if they're purchased at all).
Because pawn shops deal in used goods, they're more vulnerable to the inadvertent purchase of stolen items. As a result, you may be asked some quick questions about the item so the shop owner can gauge how much you know about it and how comfortable you are with its "back story." For items like firearms, you could be required to show proof of legal ownership. This verification process helps protect both you and the shop owner.
How much will you pay in interest if you're pawning an item?
New York state law caps the interest rate that can be charged by a pawn shop at 4 percent per month (or 48 percent APR). You'll also pay a small finance charge -- the specific amount varies depending upon the part of the state in which you live. Because most pawn shop loans last around 4 months, even if you're paying the maximum possible amount of interest, you'll still wind up paying significantly less interest than you would if you took out a payday loan.
Before taking out a pawn loan, you'll want to carefully review its terms and conditions. For situations in which you know you'll have the cash to repay the loan even before the term ends, an ability to renew the loan won't make much difference -- but if you're wondering whether you'll wind up forfeiting the item, you may want to seek out a pawn shop that can allow you to renew or roll over your loan for longer than the initial term by making an additional financial deposit.
Share17 December 2015
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