Pawn FAQ
What is a pawnshop?
Why would a person use a pawnshop for a loan?
How does a pawn loan work?
What are the charges/interest on a pawn loan?
What is an extension or renewal?
What are the requirements to obtain a pawn loan?
Can I buy/sell/pawn a gun?
How do you determine the worth of my collateral?
How do you determine the condition of an item?
How do you determine the value of jewelry?
How do you determine the price of gold or other precious metals?
Can you give me a quote on an item over the phone?
Where is my collateral kept while in pawn? Is it safe?
Are pawnshops regulated?
How much stuff in a pawnshop is stolen?
How many pawning customers lose their merchandise?
What is a pawnshop?
A pawnshop is basically a store that is authorized to issue quick small and/or short-term loans based on your collateral with no credit checks or whatsoever. You also have the option of selling your NEW and/or USED merchandise outright for CASH on the spot or for store credit towards any merchandise from the store. Furthermore, Midwest Exchange is a fully-licensed pawnshop, as well as a Buy-Sell-Trade store.
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Why would a person use a pawnshop for a loan?
Pawnshops offer a quick, convenient, and confidential way to borrow money for the consumers. There is NO CREDIT HISTORY CHECK before we issue the loan. The loan amount is based on how much a pawnbroker can sell the item for and the customer receives a FAIR percentage of that VALUE. Although the loan to collateral ratio varies over time and is different for each pawnshop.
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How does a pawn loan work?
Loans are based on the value of your collateral, NOT your credit rating or pay schedule. Subject to State Law (ILLINOIS), a typical pawn loan has a term length of 30 days/one month, plus a 30-day/one month grace period. If you cannot pay back your loan in full, including any applicable grace period, we offer extensions or renewals to give you extra time. You may also choose to surrender your collateral to pay off the loan.
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What are the charges/interest on a pawn loan?
Pawnshop interest rates and other charges, such as storage or insurance fees, are REGULATED by the state. By law, Illinois limits the total percentage charged to no more than 20% per month and it includes finance and storage fees.
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What does RENEWAL or EXTENSION mean?
If you are unable to pay back your loan in full on its due date, you can get an EXTENSION or RENEWAL on your loan by paying the interest for the month. In doing so, you will extend your due date for another 30 days and you can extend or renew your loan as many times as you see fit.
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What are the requirements to obtain a pawn loan?
You MUST be 18 years of age or older and possess a VALID STATE ISSUED ID and an item of value.
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Can I buy/sell/pawn a gun?
Yes, you can! Midwest Exchange has a Federal Firearms License. You can buy, sell, trade, and borrow money on a firearm and/or other firearm related stuff (ex. Ammo, Scopes & etc). And like any other FFL holder, if you see a firearm that you want to purchase online, we can arrange to have your gun transferred or shipped through us for you to locally pick up.
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How do you determine the worth of my collateral?
Loan amounts are based on the value of your item. Characteristics such as current condition and ability to sell may INCREASE or DECREASE the item’s VALUE. We use all the research tools we have at our disposal to determine an item’s value and get you the highest amount possible. The appraisal process varies depending on the type of item.
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How do you determine the condition of an item?
The condition of an item is the MOST IMPORTANT ASPECT in assessing an item’s VALUE. Simply put, if you take care of your stuff you will get more for them. JUST DON’T EXPECT TOP DOLLAR IF YOU DON’T TAKE CARE OF YOUR STUFF. (Such examples of neglect can be in forms of scratches, dings, no remote, missing parts, battery cover, dirty, etc.)
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How do you determine the value of jewelry?
When jewelry is the collateral, we test the precious metals and diamonds to determine its worth. We have a certified gemologist on staff as well as numerous other employees who have been working with jewelry for many years and are quite knowledgeable. The diamond testing includes a visual inspection using a jeweler’s loupe, weighing the item, sizing (determining carat weight) any stones, and noting the cut/color/clarity of each. Current market values and market trends of precious metals will also affect the value.
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How do you determine the price of gold or other precious metals?
The price of gold, silver, platinum and other precious metals is based on market values, the price for which is reviewed and updated daily and may also change per minute. Keep in mind that market prices are based on a PURE troy ounce of the stated metal.
For example, 24k GOLD means that it is 100% pure where as 14k is 58.5% GOLD and 10k is 21.7% GOLD.
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Can you give me a quote on an item over the phone?
Unfortunately, we cannot give quotes over the phone because loan amounts vary greatly depending on the condition of an item. For general merchandise, we test each item to ensure it is in good working condition. The better the condition of your item, the more money we can loan. And for jewelry, we test to ensure diamonds and gold are genuine.
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Where is my collateral kept while in pawn? Is it safe?
While your item is in pawn, you still own it. When you give us an item for pawn, we keep your merchandise — along with all accessories (remotes, cables, etc.) — in a secure area accessible only to authorized employees where it is safely stored until you come back to pay your loan in full and claim your merchandise. In addition, we are fully insured for the loan value of the collateral we keep.
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Are pawnshops regulated?
Yes. States have regulated the pawn industry for decades, and Illinois pawnbrokers are licensed and regulated by local authorities as well. We are subject to such laws as Truth In Lending Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Patriot Act, and Federal Trade Commission Rules on Data Privacy and Security Transfer. At the federal level, we are regulated by the Federal Trade Commission (FTC), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Treasury Department.
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How much stuff in a pawnshop is stolen?
Contrary to popular belief, pawnshops are actually the worst place to try and get rid of stolen merchandise. In fact, less than 1 percent of items are identified as stolen goods, and most of those are identified and reported to the authorities before being offered to the public in any way. In addition, while being highly regulated (see previous question), we also work very closely with local and federal law enforcement officials. Our staff is trained to be on the lookout for stolen property and possibly identify it based on the scenario.
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How many pawning customers lose their merchandise?
The vast majority of our customers repay their pawn loans and pick up their merchandise. The national average shows 70 to 80 percent of all pawn loans are repaid. If a customer chooses not to repay the loan, the merchandise/collateral for the loan is FORFEITED and the store takes possession of it.
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