Pawnshops are becoming a popular source of quick cash for Millennials who don’t have access to credit or access to a bank account.
A recent study by PricewaterhouseCoopers—an audit and taxing consulting company—revealed 42 percent of Millennials are turning to alternative financial services as a source for short-term loans. The most popular lender for Millennials is pawnshops, according to that same PwC study, which can be read here.
The Millennial Guide to Pawning
It’s important to know that not all pawnshops are created equal. There are simple steps Millennials can take that will make their pawning experience as simple and as stress-free as possible. Here are five steps Millennials should take before visiting a pawnshop.
Research the Fees at the Pawnshop
Know the key loan terms before you pawn any jewelry. Some pawnshops charge ticket and storage fees that aren’t disclosed. Some pawnshops can also require installment payments, which means Millennials must pay off their loan in steps—as opposed to all at once.
Also research interest rates and ask the pawnshop about their current interest rates (and how long they apply) before applying for any loan. And be aware of lower introductory rates that quickly skyrocket after the first month.
Get Jewelry Appraised Before Visiting a Pawnshop
Some pawnshops don’t have expert appraisers. Some do. Only an expert can tell you the true value of your jewelry. If you’re not sure, it’s a good idea to get your jewelry or gold appraised before visiting the pawnshop. Bring that appraisal with you, and a reputable pawnshop will take it into consideration.
Understand How Jewelry Is Stored
Pawnshops have different storage terms. Millennials should ask the pawnshop how their jewelry is stored.
Keep Track of Your Payments
By law, pawnshops must give notifications when a payment is due. The minimum number of notifications varies from state to state. Some pawnshops do the state minimum requirements and others go above and beyond. Ask about notices and be diligent about when you must pay back the loan.
Don’t Be Afraid to Say “NO”
Don’t be intimidated when discussing the loan terms with the pawnshop. Pawnshops are often located close to each other in neighborhoods. Do your research and shop around for loan terms.
Millennials should remember that not all pawnshops are created equal. For example, Provident Loan Society of New York is a not-for-profit organization. They charge roughly half the interest rate of other pawnshops in our area.
About the autor
Luke Hannan graduated with a double bachelor’s degree in Management and Marketing from Manhattan College in 2016, and spent time studying Business Technology at the prestigious Universitat Ramon Llull in Barcelona, Spain. He is a current MBA Student at Manhattan College in the Bronx.