How Pawn Shops Determine the Loan Value of Your Item

How Pawn Shops Determine the Loan Value of Your Item

How Pawn Shops Determine the Loan Value of Your Item

No matter who you are, if you hit a financial rough patch, knowing the loan value of your item at a pawn shop can be helpful and even comforting. With the rapid rise in specialized payday loans and pawn shops opening, many people are looking for some guidance through the process. We’re going to look at some of the various factors that determine the loan value of your time, and what you can expect to get when you pawn that item at a leading pawn shop like Lending Bear.

Step 1: Assessing the Item’s Condition

The first step in putting a loan value on your item is to look at its condition. The overall condition of your item will have a considerable impact on the value of that item to a pawn shop. They will look closely for signs of wear, damage, or functionality issues, and items that are in excellent or near-mint condition will be commanding the highest prices.

Step 2: Determining the Resale Value

Next, the pawn shop will look at the potential resale value of that item. When it comes down to the transaction, you’re securing a loan with collateral, and if you default on that loan the pawn shop needs to be able to make at least the cost of the loan back during resale. This means a higher resale value means you’ll be able to borrow more against it as well. Some of the resale factors include:

  • Overall popularity and market demand
  • Rarity or uniqueness
  • Manufacturer or brand reputation
  • Accessories, documentation, original packaging, etc.

Step 3: Researching the Market Price

Looking at the potential market price of the item is another technique that pawn shops will use to determine the loan value of your item. This can include checking online sources like eBay or Amazon, referencing price guides, or even consulting with experts in the industry or historical period pertinent to the item.

Step 4: Evaluating the Item’s Age and Technological Relevance

If you’re considering pawning a gadget or piece of tech, you’ll need to place a high premium on the relevance of the technology. Since technology advances so rapidly, those items also lose value faster than others. Pawn shops will consider things like age, features, and position in the current market when placing a value on these items.

Step 5: Considering Storage Space

Large or bulky items may suffer a diminished loan value, since they require more space to store or display. Since pawn shops need to store all items until the right buyer comes in, this means limited storage space comes at a premium, and could push your loan value lower.

Step 6: Negotiating the Loan Value

When determining the loan value of your item, there is always room for negotiation. The pawn shop will often start with a lower offer, which leaves room for you to negotiate a better deal. By being prepared to make a counteroffer, and being able to back it up with facts or other evidence that support your valuation.

Let Lending Bear Help You With

Knowing the value of your item at a pawn shop depends on several considerations. We strive to bring you fair and accurate loan value, making sure that you are able to get the most out of the items you pawn. We also are able to help provide you with financial resources and education to lower your reliance on payday loans. For more information on navigating short-term loans for your financial needs, contact Lending bear today to get started.