As the world's second oldest profession, pawning was first recorded in China as far back as 1000 BCE.
Queen Isabella of Spain pawned jewels to fund Columbus' journey to "India" in 1492.
Pawn shops continue to thrive today, having generated over $6 billion in sales last year in the US.
Particularly in tough economic times, pawning is a very attractive option for short-term loans for many reasons:
- Pawnshops provide loans for people who can't qualify for loans (credit rating, unemployed) or don’t have bank accounts.
- Pawning lets you capitalize on the equity of the valuables that are already in your possession without having to sell them.
- Unlike banks, pawning allows you to get money fast, without lengthy application processes and without disclosing personal information.
- Pawning allows you to keep your valuable items, which often hold sentimental value and increase in worth over time, rather than selling them below their market value. As soon as you pay back your loan, you get your valuable items back.
- Pawn loans do not require credit checks, which mean that pawn loans don't count against you on your credit score. Even if you can't pay back your loan, your credit score is not affected.
- Pawning for short-term credit is less expensive than overdraft fees, NSF fees, credit card late fees, or utility reconnect fees due to late payment.
- Unlike banks, pawn loans do not require you to pay back part of your outstanding balance every month. With pawn loans the interest accrued and the balance are paid only when you want the item back.
- Pawn loans usually allow you to extend your loan period without penalty.