According to a 2013 Federal Deposit Insurance Corporation (FDIC) study, 8.2 percent of Americans don’t have the financial resources to open a bank account. That means about 10 million people in the United States will have a hard time accessing other financial tools such as credit cards and loans. When these people need extra money, they often turn to places like a pawn shop in Cocoa FL. Pawn loans are based on the value of the physical collateral that a person uses to secure the loan. Their income and credit history are not considered.
People often pawn jewelry, electronics or tools. The pawn broker will only consider a portion of the retail value of the object put up as collateral. If the borrower defaults on the loan, the pawn broker has to make sure that they have enough value left in the object to cover their operating costs. The National Pawn Brokers Association reports that the average pawn loan totals $150. In Florida, pawn brokers may charge up to 25 percent interest. While this may sound like a lot, it is actually less than many of the late fees or reconnection fees charged by utility companies.
Once the pawn broker and the borrower agree to the value of the collateral and the amount of the loan, they fill out the loan agreement. This contains the person’s name, address, description of the item and the date the loan is due. Pawn loans are usually due in 60 days. If the person cannot repay the loan, the Pawn Shop in Cocoa FL takes the item and sells it. The borrower is not hounded by a collection agency, and there is no record of it on their credit history.
People who have good credit and access to bank loans also use pawn shops, because they like the confidentiality that surrounds pawn loans. They may also decide to sell an object instead of pawning it, to get the extra cash they need. Gold Mine Brevard is one of the Florida pawn shops that people can use as a source of extra cash. They can bring in their item for an instant appraisal and walk out with their money.
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