Pawn Shops Becoming the Foremost Choice of Cash-Crunched People

In recent years, the pawn shops in the USA have seen tremendous growth driven by surging gold and silver prices, recession and home foreclosures.

To know what is pawns just simply go through "Pawn- the Easiest and Quickest Way of Getting Money".

These are following factors which are responsible for the growth of pawn shops:

·         People with bad debt are also eligible to get a loan.

·         Provide fast cash- usually one can get cash in hand the same day he/she signs the agreement.

·        A pawnbroker allows the borrower to take back the product, kept as a security, at any time and the interest is charged only for the period the cash was borrowed.

·         The pawnbroker takes the entire risk. If he does wrong the valuation of the item or accepts the item which does not demand in the market then he is at the losing end, not the seller or the borrower.

·         The pawn shops allow you the flexibility of both selling and lending.

People often visit these shops during an emergency. The agencies have been providing service to the Americans for thousands of years. These shops abide by the state laws.  To know more about pawn shops refer to "Pawn Shop- the Right Place to Receive Instant Cash".

People usually take loan from a pawn shop for short term, for instance for a week or a month. In America, there are more than 44 million unbanked people and they find the pawn shops a favourable place to borrow from.

Around 85% of the borrowers repay their loans, whereas around 80% take more than two pawns annually, as revealed by the National Pawnbrokers Association in 2011.

Regulations for Pawnbrokers

A pawnbroker has to obey federal, state, and local norms. At the federal level, there are 13 written guidelines. It is compulsory for a licensed pawnbroker to follow the regulation within the IRS code, the Truth in Lending Act and the US Patriot Act, apart from the others.  

The easiest way to obey all the norms is to take the membership of the National Pawnbrokers Association, as the agency always remains updated about latest requirements of the federal government related to pawnbrokers.

Most pawn brokers receive the license from the state government, except few who are licensed at the local level. For opening a pawnshop, one has to get multiple licenses, such as a pawnbroker license, a second-hand dealer license, a precious metal dealer license, and a general business license.