What Does A Loan Cost?

First understand that we are in the business of loaning money. We really don’t want your grandmas class ring or your dentures. We are aware that there are some pawn shops out there that will low ball you on the value of your merchandise we would rather have a long term customer than not. We want to solve your temporary money crunch.

The state of Florida Department of Agriculture and Consumer Services governs our pawnshop. They set maximum rates and terms. State statute 539 actually lays out the rules. Lets use an example situation:

Lisa is behind on her Power bill, again, and needs $80.00 right now.Here are Lisa’s options. She can go to a bank and ask for a loan. We all know how that would turn out. She can write a check she knows will bounce but might buy her enough time to get the cash together, maybe. So bounced check charge of $39.00 and maybe the power gets turned off anyway. If you bounce enough checks it can become a credit report issue.

She can over limit her credit card, resulting in a $55.00 charge and interest on that. And if you can’t pay that back becomes a credit report issue. That is like 700% interest. She can go to a payday advance store and pay a $40.00-$50.00 fee for that and if you can’t pay it back becomes a credit report issue. That is over 1000% interest on a 2 week loan.

All of these options have serious ramifications and this minor cash flow problem can become a serious problem fast. Lucky for Lisa’s her best friend told her to go to Big Tim’s. Lisa brings her favorite guitar in and asks for a short term loan. After we establish that the guitar is hers and some minor paper work Lisa has her $80.00 in cash within 10 minutes.

In a perfect world Lisa would come back within 30 days and pay at most $20.00 in interest and get her guitar back in perfect condition. In the worst scenario Lisa never comes back for whatever reason and we put her guitar up for sale. The key to that is there is no further dealing with the pawn shop this is a collateral loan. No collection calls, no dings on the credit, no getting sued sometime in the future. You either pick up your merchandise or you don’t your choice.