We know that probably a lot of people are still climbing the famous "January slope." To get over it, they will need extra help, and one of the most common right now is the well-known pawnshops, where you can get a loan in exchange for an item or piece of clothing.
Even though going to a pawnshop isn't always the first thing we suggest, many people do it when they need money fast. If this is the case and you need to pawn to get out of financial trouble, here are some tips for before, during, and after pawning your item. Look at all of them.
Before going to a pawnshop, you might want to look into other options, such as a personal or payroll credit at a bank. These may be better for your needs.
Before you pawn your things, you should go to a few places to see how each one works and what loan terms they offer.
Compare at least three institutions. Pay attention to the Total Annual Cost, the percentage of your pledge that will be valued, and the annualized interest rate. Pick the pawnshop that has the best terms for you.
Think about how much you can pay to get your goods back. Remember that this is a promise, and you will have to pay for it out of your future earnings.
Before you give something to a pawn shop, make sure it is a legitimate business. The Federal Consumer Protection Agency's Public Registry of Pawnshops is a great way to find out if they are legitimate.
The surplus entitlement is the amount of cash you can get when your valuables are sold for more than the amount you borrowed plus the interest you earned.
During the pawning
Check on renewals. That is, how many times you can renew your pledge and how long it will take to get your money back.
If you want to pawn jewelry or other valuables, pay attention to how much the scale says. This should be easy to see, and you should be able to check to see if the weights of your clothes are marked.
Make sure you get good service and that they answer any questions you may have when you pawn an item. If this isn't the case or if you're treated badly, you have the right to go to another pawnshop.
In Mexico, there are two kinds of pawnshops: Private Assistance Institutions, which don't make money (like Nacional Monte de Piedad and Fundación Rafael Dondé), and private companies, which usually charge higher interest on loans.
After the pawning
Try to pay off your debt two or three days before it's due, and if you need more time, see if the contract lets you ask for an extension or renewal.
If you can't pay back the money you borrowed, you may be able to get some of it back through the "right of surplus."
To use this right, all you have to do is go to the pawnshop with your contract or pawn ticket and a valid government ID and ask for your surplus to be validated.
Remember that the Federal Consumer Protection Agency (Profeco) is the place to go if you have a problem with a pawnshop or want to file a complaint.