What is a pawn shop? A pawn shop is the world’s oldest lending institution. Pawn shops extend credit to individuals on a short term basis, holding their articles of value for collateral until the loan is paid back. Pawn shops have a rich history worldwide. Their origin has been traced as far back as 3,000 years ago in China. The three balls that are used as a universal pawnshop symbol were the coat of arms of the famous Medici Family who were originally pawnbrokers and later became the largest banking company in the world. Legend holds that even Queen Isabella of Spain pawned the crown jewels to fund the voyage to discover the New World. The stories surrounding this industry are endless and quite interesting. Throughout the ages people have had credit needs that pawnbrokers have serviced. A recent survey found that today 30% of the general public do not use traditional banking services such as checking and savings accounts or credit cards. Many people are “banking” with alternative sources of credit such as pawn shops because of the convenience and privacy the pawn shop offers them. Pawn shops lend money to people with many and varied needs. Unlike traditional lending services, why you borrow money is your business and no unnecessary questions are asked.

 

THE FACTS

How do I get a loan? Loans are made to individuals 18 years of age and older who bring in items of value to be held as collateral (security for a loan). These items are stored in secure places on the premises and are not available to anyone to see or purchase. By Oregon law, a state or federal pictured identification is required to make a loan.

What items can be used for collateral? Pawn shops advertise,”loans made on any item of value”. Value is the key word here. What something is worth is what someone is willing to pay for a particular item. Items of value to most pawn shops include guns, jewelry, stereo equipment, sporting goods, musical instruments, TVs, cameras and much more. It is even reported that exotic wild animals have been used for collateral! For certain, pawn shops do not want stolen, nonworking or damaged merchandise. At Silver Lining, most loans take about 10 minutes to complete. This is because our staff is highly trained to evaluate most merchandise brought in for loan.

How much can I borrow? Most loans are made with the assumption that the borrower wants to pick up or redeem their merchandise. The amount of the loan is a compromise between the pawnbroker and the customer, in other words, how much the customer needs and what the pawnbroker is willing to invest in the item in the event the customer does not redeem the loan. Keep in mind that most articles depreciate in value. Pawnbrokers will consider value from a used wholesale approach as well as what resale value would be. Condition, age and general appearance of merchandise is all taken into consideration. Most pawn shops do not take items over three years old if they fall into the electronic or audio department due to difficulty with repairs and parts. At Silver Lining, our staff will loan you as much as we can on your collateral but one should note that we expect you to reclaim your merchandise. Remember the more you borrow, the more you will pay in finance charges.

What is the difference between a pawn and a hock? There is no difference between them, both terms refer to a loan. Sometimes, people confuse these terms with selling an item to a pawn shop.

How long can I borrow money from a pawn shop? According to the laws in Oregon, a pawnshop writes a loan for 60 days with a 30-day grace period. Interest is accrued monthly and generally is prorated for unused time. This 90-day loan can be renewed at the end of the contract if necessary. At the end of a loan contract one of two things must occur. Either the loan is redeemed or paid in full and the items used for collateral are picked up by the borrower or the loan can be renewed by paying all finance charges to date.

How do I renew a loan? At Silver Lining all loans are renewed for a 60-day period and a 30-day grace period (the same as the original loan). Other shops, in accordance to state law, only renew for 60 days. Silver Lining wants our customers to redeem their loans, and will go the extra step to ensure this.

How do I redeem my loan? A loan may be redeemed anytime after it is made. It may be redeemed by the bearer of the contract. If the contract is not present, the person who made the loan would need to have identification which would be used to make an affidavit to replace the contract. Cash payment is required at the time of renewal or redemption. Some shops will even redeem items that are suitable for shipping through the mail for an additional charge. Silver Lining will ship jewelry items only. Call for information.

What happens to loans that are not redeemed? When a borrower does not redeem or renew a loan according to the terms agreed upon, the items, used for collateral become the property of Silver Lining. By Oregon law, this is effective the 31st day after the due date of the loan. This policy is regulated by Oregon law. Silver Lining wants you to reclaim your merchandise as most loans are made with the understanding that this is your intention. Some shops will offer a period of leniency for which additional charges may be added without losing your merchandise. Talk to Silver Lining about your needs, we are happy to try to help. We often will go the extra mile for our customers in order for them to redeem their merchandise. Things happen, we know that, talk to us.

What else do I need to know? Basically that’s the facts! Like any other lending institution, Silver Lining wants to service our customers to their complete satisfaction. Acquiring a loan through Silver Lining may be the easiest transaction you ever perform involving credit. It is a simple, quick and confidential transaction without a lot of personal questions. Unlike banks, Silver Lining does not question your reason for obtaining a loan. We merely ask for collateral to secure your loa n.Terms of your loan are clearly stated and easy to understand and designed to service the customer’s short-term money needs. As stated above, Silver Lining is regulated by state laws pertaining to terms and interest rates. But different shops will have different store policies.

 

THE MYTHS

Pawnbrokers charge too much for credit. Pawn shops do not loan money on an annual basis. Loans are made for short-term cash needs. By Oregon law, a pawnshop may charge 3% per month interest, a 10% set-up fee up to $250, a 5% storage fee up to $250. Example, a $100 loan would cost $24 after three months as follows: $10 set-up, $5 storage, $9 interest, a 60-day loan with a 30-day grace period. Rates are set by the Oregon Legislature and regulated by the Oregon Department of Consumer and Business Services. Extending credit to a community of people who may not otherwise receive the credit they need is very reasonable when viewed in these terms.

Pawn shops only deal with people who are down and out. Not true! People in all walks of life and income levels have credit needs today that may not be met by the traditional lenders such as banks or credit cards. Borrowing money is not always for financial crisis or despair. Whatever the reason, the pawnbroker is willing to extend credit with the proper collateral to obtain a loan. All loans are strictly confidential as well. At Silver Lining, our loan officers are all experienced, compassionate professionals who will treat you with respect and fairness.

Pawn shops don’t give you what something is worth. What something is worth is what someone is willing to give you. Value in a pawn shop is established for loan purposes only. Silver Lining will consider the condition, age and general appearance of an item to establish a value. In the event the item is not redeemed, the resale or retail price is also considered.

Pawn shops deal in lots of stolen merchandise. Contrary to what may have been popular belief in the past, pawn shops do not buy, sell, trade, make loans on or want any stolen merchandise. All transactions are reported to the local police department and pawn shops work closely with the local authorities to guard against providing an outlet for stolen goods. Stolen merchandise can be easily traced through a pawn shop since pictured identification and current street address and phone number are required. Criminals and thieves therefore avoid this confrontation and possible exposure.

Pawn shops are all located in bad neighborhoods. Not any more! In the past, pawn shops were found in older downtown locations that became lower income areas of town. Today you can find a pawn shop just about anywhere. No more bars, grumpy men with cigars, or dingy locations. Your local pawn shop is trying hard to break those old negative images and provide a pleasant, convenient place for you to do business. Silver Lining has gone to great efforts to make the appearance and feeling of our store comfortable for our customers.

Pawn shops only sell junk. Wrong again! Nobody wants non-working or damaged merchandise. Most pawn shops have trained employees who check the working condition of the articles brought in to their stores before they consider making a loan on or purchasing something. Reputable shops may offer a warranty or at least a good faith promise that, to the best of their knowledge, the goods they sell are in working condition. At Silver Lining everything is sold with a 30-day full money-back guarantee.