What is a pawn shop and how to select the best in Melbourne?

Pawn shops are institutions that immediately lend money in exchange for guaranteeing movable property such as watches, jewelry, electronics, electrical appliances and even vehicles. However, pawn shops are not the best option to face financial difficulties, because pawnshops generally offer very expensive credit compared to other options on the market, even above financial institutions. Going to one of these establishments is already the last option. However, if you have no options left, and you are in real emergency, having no time for hours of paper-works, and other lengthy formalities, choosing one of the best Melbourne Pawn Shops would be ideal. Here we present the tips that you need to consider.

Be careful with interests

You must bear in mind that although in these businesses access to cash is very simple, it is also very expensive, because the annual rate can be higher than 150 percent. 

Consider your ability to pay

Before making the commitment it is important that you consider your ability to pay for the recovery of your pawned items, because once the performance period is met without you having paid the amount of your debt, the company will put your item up for sale, to recover the loan amount. 

Compare between businesses

It is advised that before pawning your assets, you go to several establishments to compare how each one works and what loan conditions it offers you. With this you can choose the one that meets your needs.

Check the Total Annual Cost

Once you decide which pawn shop to go to, check the Total Annual Cost (CAT) of the loan, which is the standardized measure of the cost of financing expressed in annual percentage terms. It incorporates all the costs and expenses inherent to the loans granted by institutions. 

Check small print

As in banking institutions, the interest rate on the loan varies according to the services provided by each pawn shop, such as – storage, insurance against theft and mishap, etc. All this must come in the contract and you must read it and clarify doubts before signing. 

Ways to sell gold

Among the ways to carry out the transaction are –

Online gold sale: Selling gold over the internet turns out to be the easiest method to offer and sell. In case you want to sell the gold through auction websites, you must take certain precautions.

Sale of gold at auction house: Another way to sell gold is through auction houses. When calculating the price of the gold you will sell, you should be aware that the auction house will apply a cost of fees and commissions.

Selling gold at pawn shop: Pawnshops lend the money by evaluating their gold at a price much lower than normal market value, but they offer the money quickly in cash. In case you want to get the gold piece back, you will have to pay off the borrowed money along with the interest. In case you do not want a loan, they can buy your gold at a lower price to make a profit in return.