What is a Pawn?
A pawn is an item of value that is given to a pawnbroker in exchange for a loan. The pawnbroker holds the item as collateral until the loan is repaid. If the loan is not repaid, the pawnbroker has the right to sell the item to recoup the loan amount.
How Does Pawn Work?
When a person pawns an item, they receive a cash loan based on the value of the item. The pawnbroker assesses the value of the item and offers a loan amount. If the borrower agrees to the loan terms, they hand over the item to the pawnbroker in exchange for cash.
Examples of Pawned Items
- Jewelry
- Electronics
- Collectibles
- Tools
Case Studies of Pawning
John pawned his grandmother’s diamond ring to get a loan to cover medical expenses. He repaid the loan within the agreed-upon time and retrieved the ring.
Pawn Statistics
According to the National Pawnbrokers Association, there are over 10,000 pawn shops in the United States, and pawnbrokers issue over $6 billion in loans each year.
