Pawn shops have gotten a bad rap in the past. Negatively portrayed in the movies, pawn shops are associated with seedy-looking characters and dark and dirty storefronts.
Well, the times have changed! Pawn shops are prominently featured in TV shows as great spots for bargains and the perfect place to get short-term loans that aren’t available from banks or traditional lenders. Modern day pawn shops are clean, well-lit businesses that serve consumers from all walks of life.
Time to correct some of these misconceptions:
- Pawn shops charge high interest rates: Pawn shop interest rates are determined by the state, city or municipality that the pawn shop is located in. Pawn shops in the Boston area are set at 3% monthly while Providence pawn rates are set at 5% monthly. Compare these rates with those in New Hampshire with a monthly interest rate of 20% per month. A smart consumer will find out the interest before taking a loan.
- You have to make monthly payments: In Rhode Island it is for 3 months and in Massachusetts a pawn loan is for 4 months. This means you do NOT have to make monthly payments. Simply pay the fees and interest that have accrued by the end of the loan period and you can renew your loan for another 3 or 4 months depending on the locatoin of the original transaction. It’s important to know how long the loan is for since some communities may have loan terms that could even be weekly.
- Pawn Shops buy stolen merchandise: Never! Pawn shops report every transaction they make to local law enforcement and then hold onto the item for a specific period of time, giving police the chance to investigate if the items were the result of a crime. Pawn shops are generally required to require government issued ID’s, take photos of the items and the person who brought them in and to provide these photos to police if asked. This makes it easier for police to recover stolen items and prosecute the criminals. Pawn shops do their part to NOT take stolen items.
- Pawn Shops try to cheat people, offering below market value: The value of certain items goes up while others go down. A reputable pawn shop would be happy to explain how they came up with their offer. Gold & diamond jewelry is generally valued on the scrap value of the gold and a percentage of the wholesale value of any diamonds, not what you may have paid for the item at retail. Because the price of gold goes up and down with the market, the amount you may be offered on a buy or a loan may change by the minute. With miscellaneous items like electronics, the value falls the minute you open the box and because technology keeps changing, the 2-year-old TV, laptop or digital camera you have may even be obsolete by now. Most pawn shops search websites to determine the used resale selling price of an item and offer a percentage of that. This means the TV that you paid over $1,000 for may only be worth a $100 loan. Don’t be afraid to ask how they came up with their offer and to shop around for the best offer you can get.
- Pawn shops are dark, dingy and scary places: Empire Loan, with 8 locations has worked hard over the past 30+ years to create well-lit and welcoming stores that customers feel comfortable in. We take pride in making sure the items we put out on display are clean and in good working order. The stores feature beautiful jewelry cases with only the best in gold, platinum and diamond jewelry at prices that are a fraction of typical jewelry stores. Empire Loan employees are expected to be neatly dressed, polite and professional with all customers who they come in contact with. Seeing is believing, stop in and see it for yourself. (or peek below)