How does pawning at Pawnshop Works?

Pawnshop is one of the easies way to borrow money in a short period. Pawnshop gives the consumer a quick way for their financial needs without any legal procedures or credit / financial check. As long as the borrowers provide a collateral, secured by items of value which the pawnshop holds to guarantee repayment. 

LOANS ITEM / COLLATERAL

Pawnshop lend money in exchange of the value of a certain collateral. Most common collateral acceptable in all Pawnshops are Jewelries. Some pawnshop accepts other collateral such as electronics, motorcycle and other valuable collectibles that the pawnshop are willing to accept.

LOANS VALUE

In gaining the value of a certain collateral. Collateral are being appraised at the pawnshop  for the value that best suites on the item. It is appraised on the price deeply discounted from the item's expected retail value or based on the tariff itself.

LOANS TERM

The typical pawnshop loan term is up to 4 months. From the date loan granted borrowers is given 30 days in duration before it matures, after the maturity dates the borrowers is given another 90 days in duration before it will totally expired. 

The typical interest rate now a days is 5 percent or less. The customers gets a pawn ticket stating the terms of loan, description of the pawned item, the amount, due date / maturity date and expiry date for payments with the customers information and signature on it.

LOANS PAID

Customers may renew their pawned items by just paying the interest itself without the principal on it. For this, your pawned items is being updated without foreclosing the item. With this the customer has to surrender the pawn ticket to the pawnshop together with the payment of interest. The pawnshop will issue a new pawn ticket and an official receipt of their payments.

LOANS UNPAID

If a pawnshop customers has not renewed or does not repay the loans or interest on the said expiry date, the pawned items becomes pawnshop property which is specified in the pawn ticket  terms of loan or loan agreement. Pawnshop has the right to sell the items for public auction.

Pawnshop prefers that loans are being repaid for the profit from the interest is much safe without the risk inherent in a sale of the collateral. Most pawnshop customers are pawning and redeeming the same valuables.

In case of stolen items. Pawnshop could not identify if the particular item was stolen or not.  Pawnshop actually wants not to be stuck with stolen items. Panwshop generally require customers to provide full identification when pawning.

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Diamond

Diamond are the hardest substance on earth. They are uniquely resistant to damage by heat or scratching and can be cut or polished only by another diamond. But an extremely hard blow to the girdle can cause a diamond to chip or cavity.

Diamond  simplifies the four C's - cut, color, clarity and carat weight, as well as diamond shapes. Carat is based on the size of the diamond.

Basic parts of Diamond

Girdle is the edge of the diamond and classified by their thickness (thin to thick), girdle protects the edge of the stone from chipping.

Crown is based on height of the diamond, a large flat area on the top and a number of facets

Pavilion is the most important part in diamond, reflect the light that passes through the crown 

Culet is a tiny facet or point at the base of the pavilion, where the facets of the pavilion meet, rough or polished facet.

Facet a cut use to improve the appearance of a gemstone

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Distinguishing the Different "Karat" in Gold

How to Distinguished the different "KARAT" in GOLD

For preparation you need the following:

Test Stone, a dark stone, used to test gold karat as well as silver and platinum. The object to be tested is scratched on the surface of the stone and a test acid solution determines the karat of the scratch.

Bottle of Nitrics Acid, also know as aqua fortis and spirit of nitre, acid for gold testing.

Cigarette Ashes and Water

Steel Sand Paper (Fine), alternative way to distinguised if the metal is pure gold or gold filled

Small Trangle Shaped File or "KIKIL", another alternative way to test the metal if its pure gold or gold filled

Here's the Procedure:

Rub the metal to be tested on the test stone and leave a very distinct GOLD DEPOSIT on it. Pour nitric acid on the half portion of the gold deposit and the other half as is and see any changes in color between the two for a few minutes.

If the color changes into REDDISH its 10 kt, LIGHT RED is 12 KT, YELLOWISH GOLD its 22kt. If the gold deposit is totally dissolved by the nitric acid, the metal does not contain any part of pure gold, therefore, it is NOT GOLD.

Here's the practical way of testing 18 karat up to 22 karat fineness in gold

Pour nitric acid on the gold deposit then pour cigarette aches once then pour again nitric acid and wash the test stone in water, see if there is any gold deposit left on it, see if the color is reddish brown its 18kt., yellowish golden its 22 kt., and if the gold deposit is completely dissolved, the karat fineness is lower than 18kt. 

Pure Gold - is gold inside and outside of the metal.

Gold Filled (G.F.) -  is the process of sweating gold all over the surface of a base metal or rolling a base metal on a thin sheet of gold with a different finenes in gold.

Gold Plated (G.P.) - is the process os washing a base metal with the different fineness in gold solution by means of ELECTRO PLATING MACHINE

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GOLD

GOLD is pure and  fine, it is naturally yellow in color and it is the most malleable and ductile of all metals. Pure Gold is alloyed with other metals to make it harder and more resistant to wear, to reduce it's cost and to obtain different color. It is known by Karat / Carat.

KARAT indicates purity or how much of the metal in a piece of jewelry is gold.

Most common karats used  for gold / fineness of gold karat

24K (.999) pure gold (too soft to use in jewelry)

22K (.916) very soft for use of jewelry / bend out of shape

21K (.875) very fine jewelry

18K (.750) fine jewelry

14K (.585) use in traditional jewelry / hard and metal maintain it's original look

12K (.500) color is not attractive

10K (.417) average or legal karat to be called GOLD

  

Yellow Gold is the common jewelry being used.

White Gold is slightly in yellow color and plated with Rhodium, a chemical element that is a rare, hard, durable, silvery shiny white metal.

Rose Gold a large proportiono f copper in the metal alloy and give the gold a beautiful pink color.

Platinum is more precious than gold. It marks PT or 950 PLAT on the jewelry to identify. It is common used in wedding rings and it is very durable 95% platinum.

Rose Gold

White Gold

Yellow Gold

Platinum

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About Pawnshop

Pawnshop

A business that lends money with interest rate in exchange for collateral such as Jewelry or anything else that is judged to have a resale value. Pawnshops play an important role in many communities by providing people with an easy, fast way to borrow small amounts of money.

Pawnbroker is an individual or business (Pawnshop) that offers secured loans to people, with items of personal property used as collateral. The word pawn is derived from the Latin pignus, for pledge, and the items having been pawned to the broker are themselves called pledges or pawns, or simply the collateral.

If an item is pawned for a loan, within a certain period of time the pawner may purchase it back for the amount of the loan plus some agreed amount for interest. The amount of time, and rate of interest, is governed by law or by the pawnbroker's policies. If the loan is not paid within the time period, the pawned item will be offered for sale by the pawnbroker/secondhand dealer. The pawnbroker/secondhand dealer also sells items that have been sold outright by customers to the pawnbroker or secondhand dealer.

Pawnbroker - Any person engaged in the business of lending money on the security of pledged goods and who may also purchase for resale from dealers.
Pawnshop - The location at which, or premises in which, a pawnbroker regularly conducts business

Pawn or Pawn transaction - A written contract/receipt of personal property as security for a loan or security of payment for the money borrowed

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