Spring Break
The power of the pawn
Shops ease economic stress
Natalie Saeger
Issue date: 10/13/08 Section: Money/Health
Also, if banks aren't willing to approve higher priced loans for whatever the reason, a pawnshop will be able to the provide money.
Peterson said if people need money to cover checks that they have out, they can come to a pawnshop to get a couple hundred dollars to cover them. The interest fees will be a lot less than what a return check fee from a bank would be, as well as the fees from a bounced check.
The interest rates for pawning are set at 20 percent for every 30 day period. For example, if a loan pawned on an item was agreed upon for a $25, the 20 percent interest for 30 days would make the item $30 to pick up.
The higher the loan the more the interest, Dillinger said. So, according to the 20 percent rate, a $1,000 loan would have a $200 interest rate per month.
Though the loan interest rates are high, they can prorate, Dillinger said, which means the amount of money refunded is proportional to the amount of time that passed from a specified date. If the loan and item pawned at $1,000 is picked up a week after pawning the total loan will cost around $1,050.
The best bet for anyone looking to pawn is to do things in a quick fashion, Dillinger said, but for the times when someone might have acted too quickly, there are ways to get a sold or pawned item back.
Peterson said at his store if someone sells something and they want it back, by law, a pawnshop has to hold the item for 30 days. The item won't get marked within the 30 day period, but it will have the finance charge of 20 percent added.
The majority of the decisions pawnshops make involving sales have been laid out by government regulations.
"The national average for pawnshops (of having stolen goods) is less than one-tenth of a percent, which is one item in a thousand," Dillinger said, adding that the regulations pawnshops have to follow mostly come from the city.
According to the Eau Claire Code of Ordinances, under the business licenses and regulations chapter, a pawnbroker has to require a customer to present either a current valid Wisconsin driver's license, identification card or photo identification card or a photo driver's license issued by another state or province of Canada.
Peterson said if people need money to cover checks that they have out, they can come to a pawnshop to get a couple hundred dollars to cover them. The interest fees will be a lot less than what a return check fee from a bank would be, as well as the fees from a bounced check.
The interest rates for pawning are set at 20 percent for every 30 day period. For example, if a loan pawned on an item was agreed upon for a $25, the 20 percent interest for 30 days would make the item $30 to pick up.
The higher the loan the more the interest, Dillinger said. So, according to the 20 percent rate, a $1,000 loan would have a $200 interest rate per month.
Though the loan interest rates are high, they can prorate, Dillinger said, which means the amount of money refunded is proportional to the amount of time that passed from a specified date. If the loan and item pawned at $1,000 is picked up a week after pawning the total loan will cost around $1,050.
The best bet for anyone looking to pawn is to do things in a quick fashion, Dillinger said, but for the times when someone might have acted too quickly, there are ways to get a sold or pawned item back.
Peterson said at his store if someone sells something and they want it back, by law, a pawnshop has to hold the item for 30 days. The item won't get marked within the 30 day period, but it will have the finance charge of 20 percent added.
The majority of the decisions pawnshops make involving sales have been laid out by government regulations.
"The national average for pawnshops (of having stolen goods) is less than one-tenth of a percent, which is one item in a thousand," Dillinger said, adding that the regulations pawnshops have to follow mostly come from the city.
According to the Eau Claire Code of Ordinances, under the business licenses and regulations chapter, a pawnbroker has to require a customer to present either a current valid Wisconsin driver's license, identification card or photo identification card or a photo driver's license issued by another state or province of Canada.
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