Did you know how the pawnbroker calculates the amount that is given to you for your pawned item? It doesn’t matter whether you bring a car, boat, jewellery or something else; there are numerous factors that are considered when deciding how much pawn loan you’ll receive from the pawnbroker. Pawnbroker’s processes may vary from each other somewhat but usually the main processes remain the same. Here we will discuss how you can obtain maximum value pawn loans for your valuables.
The chief objective of a pawnbroker is to increase the loan potential of every item that reaches the counter. However, when evaluating potential collateral, pawn shops need to take a few things into considerations. First of all, pawnbrokers will have to be transparent concerning how much they actually get for your item when they have to sell it (in the instance where you, as a customer don’t turn up with the payment to redeem your item back). Secondly, pawnbrokers will have to assist you to recognise the other deciding factors that impact how much money you’ll get for your pawn loan.
I. Factors Involved in Deciding Your Pawn Loan Amount
[A] Item in great demand
The pawnbroker considers the supply and demand of a particular item before deciding the pawn loan value. If the pawnbrokers feel that the item doesn’t have high demand in the market and it will end up being sold to a wholesaler then the pawn loan amount will be lowered.
[B] How much can the pawn shop actually get for your item?
A pawn shop has to take into consideration numerous factors to decide the final pawn loan amount. The estimated resale value of an item is the main factor. It is always considered in terms of high point and low point. The high point indicates retail sale price – that’s when your item gets sold in a pawn shop whereas the low point indicates the wholesale price – this occurs when your item doesn’t get sold in the pawn shop and the pawn shop decides to sell your item to the wholesale merchant who deals in used goods.
When determining the estimated selling price, pawnbrokers have to figure out the overhead costs of the pawn shop as well as a profit so that the business can survive.
II. What are some main factors that will increase my pawn loan amount?
[A] Item’s working condition: The golden rule is to preserve all your prospective collateral in excellent working condition.
[B] Item’s aesthetic condition: The second important thing is to uphold the aesthetic condition of your potential collateral in excellent condition.
[C] The customer’s pawn history & relationship with the pawn shop: When a customer regularly pawns the items with the pawn shop and redeems with a relatively high rate – in such cases, the customer generally obtains a higher final loan amount because the pawn shop trusts the customer and believes that the customer is going to redeem the item. As long as this trust remains – a healthy relationship is maintained between the customer and pawn shop. Thus, customer’s relationship with the pawn shop and pawn history both plays a vital role towards the final pawn loan value.
Also Read: Tips for Negotiating at Pawn Shops While Selling or Buying
Mega Cash is a premier pawnbroker and second-hand dealer based out of Sydney. Mega Cash has processed over 200,000 short-term loans for its customers during the past 19 years. Assuredly, Mega Cash is your instant money lender who also buys gold in Sydney.
