What is a Collateral (Pawn) Loan?
- A pawn loan is a loan that is secured by collateral held by the pawn broker. Different pawnshops loan on different items.
- All customers provide collateral, eliminating the need to distinguish high-risk from low-risk borrowers.
- Typically, loans are small, averaging between $50 and $200, although they can be as small as $20 or as high as several thousand dollars, depending on the value of the collateral.
Why would someone go to a pawnshop to get a loan?
- Pawnshops offer the consumer a convenient and confidential way to borrow money in a very short amount of time (usually 5 – 10 minutes).
- A short term cash need can be met with no credit check or legal consequences if the loan is not repaid.
How does a pawn work?
- The process is much the same as any other lending institution, with the primary difference being the use of collateral instead of credit. With Loyalty Pawn we hold and store your personal collateral item until the loan is repaid.
- Pawn loans are written for four months (120 days).
- At the end of the loan period, the customer is required to repay the loan in full plus the small amount of interest due, then the collateral is returned. If the customer cannot pay the loan in full, the option of paying only the interest due and rewriting the loan for another four months (120 days) is available. If the customer does not repay the loan in full plus the interest due or rewrite the loan by the due date (plus a 10 day grace period), the collateral is forfeited to the pawn broker.
- All interest rates and terms of a loan are governed by the State of California and cannot be changed or modified by the pawn broker. A state licensed pawn broker is the only one who can legally write a pawn loan.
What is the loan procedure?
- Bring us your collateral merchandise (see below for accepted items).
- Tell us how much you would like to borrow.
- One of our associates will evaluate the item(s) and discuss the allowable amount of your loan. This is a percentage of the value the broker believes the collateral would bring in a sale. Although the ratio varies across pawnshops and the type of collateral (say jewelry or a mountain bike), a typical loan is about 50 percent of the items resale value.
- Present a valid, government issued photo ID.
- Sign the required documents and collect your cash.
What items can I pawn?
- We take almost anything of value. Common items that people pawn are gold, diamonds, watches, platinum, silver, and coins, as well as instruments, electronics, tools, televisions, laptops, iPods, DVD’s, DVD players, bikes, cameras, cars, collectibles, etc.
What items do you not accept?
- We do not accept stolen items.
- We do not accept guns.
Can I sell my item?
Loyalty Pawn is the place where you can sell just about anything of value. Our experienced team is ready to help you evaluate your gold, platinum, diamond or gemstone jewelry. We also will buy musical equipment and electronics. Our transactions are confidential, convenient, and fast by giving you instant cash on the spot!
Reasons to sell at Loyalty Pawn:
- Open 7 days a week
- All transactions are confidential
- Your items are appraised by professionals
- Friendly customer service
- Get quick cash on the spot
Is it safe to leave my stuff at a pawnshop?
- Yes, we have state of the security system, that is monitored by the police 24 hours a day.
- We use a top of the line survelience system that records 24 hours a day, inside and out, as well as throughout our entire store.
- We store all jewelry and high end loans in either walk in vaults or UL rated safes that are near impenetrable.
- We take pride in our business and treat our customers items as if they were ours – which is why we go to great lengths to give our customers, as well as ourselves, peace of mind knowing that the items are safe and secure.
Do most pawning customers lose their merchandise?
- On average, 75 to 85 percent of all loans are repaid. Repeat customers make up most of our business, similar to any other lending or retail establishment.
- Pawnbrokers know the vast majority of their customers because they often borrow against the same items over and over again.
- It is solely the choice of the customer whether he/she elects to repay the loan.
What is the difference between buying at a pawnshop and buying at a retail store?
- Price! Pawnshops can offer you the same quality merchandise as a retail establishment at prices ranging from 1/3 to 3/4 off retail.
- Pawnshops are an excellent place to find great deals on Gold, Diamonds, Musical Instruments, Electronics, Video Game Systems, Cameras & much much more!
- Make a fair offer; most prices are negotiable.
Is it true that you only sell used merchandise?
- Loyalty Pawn sells pre-owned merchandise in addition to new merchandise through our online eBay store AND our 5 stores located throughout the greater Sacramento area, including Roseville and West Sacramento.
- We have been in business for over twenty years, and pride ourselves in customer service and a clean, inviting and friendly environment.
How do I know that what I’m buying isn’t stolen?
- Pawnshops are a highly regulated industry at the Local, State and Federal levels.
- Every consumer provides government issued valid identification in a pawnshop whether selling an item or getting a loan.
- Every pawn loan and buy is reported on a JUS123 form which is signed, thumb printed, and forwarded to local law enforcement to ensure that the item has not been reported stolen.
- In California, every item sold is held for 30 days before the item may be resold in order to give law enforcement time to run the required check.
- Pawnbrokers are governed by all of the major federal laws that apply to entities designated as financial institutions. The federal laws that regulate the pawn industry are the Patriot Act, the Truth in Lending Act, the Equal Credit Opportunity Act, as well as Data Privacy and Safeguard of Consumer Information as part of the Federal Trade Commission (FTC) Rules. Pawn shops that deal in firearms are regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Pawnbrokers may also be Federal Firearms License holders.