Pawn Vs Selling and (re-buying)

[ardorlan]

I understand why pawn shops cannot give you 100% of the value of your gold or silver when you pawn it for a loan.

When someone buy gold or silver they are usually loosing money (at that very moment) in a perineum cost

If I only needed 50% of the value of my stash would it be better to sell it or pawn it.
Let say I needed the money for 6 months?

What kind of interested rate could you get at a pawn shop?
And would the interest you pay over 6 months be cheaper then just selling and rebuying (if the market stayed flat)

What if the Market for gold and silver was at its normal yearly return rate?
What is the market historical yearly return rate for gold and silver?

[OneBiteAtATime]

I think this question would have gotten more response a few years ago. But when we're looking at QE3, Greece, a national debt that has skyrocketed (talk about hyperbolic), a congress who doesn't seem to understand the magnitude of the monster, a President who doesn't particularly like this country, and a middle east that is on fire - brother if you part ways with half your stash now, you shall never see it again.

If prices WOULD stay constant, sell it. You may be able to pick up some deals if you keep your nose to the grindstone for that 6 months. But it won't remain flat, and I bet you know that in your bones.... if you'll listen to them.

[Oakair]

Id pawn...maybe try repaying in installments to keep the interest down (is it compounding, or is the interest just on the initial principal?)

[blackrabbit]

Forget pawn shops, they generally have stupid-dumb interest rates. Much better to sell, but definitely not to a pawn shop. Sell half your stash if you really need the money now and you are realizing a profit. You might be able to buy back on a dip.

[Mercuryman]

I would not sell any PMs, Take out a loan?

[biglouddrunk]

i bet pawn shops don't like doing loans on coins, but I could be wrong. You could make money with a limited risk if they give you a high enough % of the content price and charge a low enough interest rate. Here is a scenario. You pawn 10 oz of silver for $300 when silver is $40 per oz. If silver goes up you will have only risked the interest you paid when you pick your silver back up, but if the price of silver fell it would not be worth picking your silver back up. I guess one could treat it like an expensive way of shorting the market.

[mtalbot_ca]

It depends how much we are talking about. In my opimion, the bank could certainly consider the part of your stash that is bullion.

Cheers,

[Sheikh_yer_Bu'Tay]

You should get about 60 to 70% of the value of you PM's at pawn. Their interest rates in my state are 21+% per month.

It is a good idea to pawn PM's for a short loan if you know you can redeem them in 30 to 60 days. After that the outrageous interest rate will eat up the value of your PM's. If you want to extend the loan out to 6 months, that is pretty risky.

Another thing is theft. In my state the laws state a pawn shop has very limited liability when it is robbed. You will only get back pennies on the dollar if they get ripped off.

Maybe someone here would be willing to loan you money and hold your PM's as collateral until you pay back the loan. People have done this the world over for centuries. Who here do you trust enough to do that? Contact them and ask.

[Oakair]

You should get about 60 to 70% of the value of you PM's at pawn. Their interest rates in my state are 21+% per month.

It is a good idea to pawn PM's for a short loan if you know you can redeem them in 30 to 60 days. After that the outrageous interest rate will eat up the value of your PM's. If you want to extend the loan out to 6 months, that is pretty risky.

Another thing is theft. In my state the laws state a pawn shop has very limited liability when it is robbed. You will only get back pennies on the dollar if they get ripped off.

Maybe someone here would be willing to loan you money and hold your PM's as collateral until you pay back the loan. People have done this the world over for centuries. Who here do you trust enough to do that? Contact them and ask.

Now theres an idea!

There are also peer-to-peer lending sites that wouldn't require much collateral, but would have their own terms and whatnot...

[coppertone]

I've done both. Interest rates at pawn shops are gross, 20% or more per month. However, you will likely get the same discount by bringing your coins to a coin shop to sell. If the loan will be paid back in 30 days or less there is little difference between the two. A private sale at full value would be best. I am also reluctant to get rid of my PM's as I am finding it more difficult to find replacements for what I've sold and most recently have chosen the pawn shop route.

[ardorlan]

it looks like pawngo internet site has rates of 3% to 6%(trying to find out if these are monthly or yearly rates) these sound reasonable (if yearly) and I am looking into it more. It seems like you should be able to get REALLY good RATES for pawning silver if you only get a loan for half the value of the actually item, I mean the best thing for them is for you not to pay back the loan, then they make 50%!

[ardorlan]

so pawngo will loan me 66% of melt on my silver, but they charge 6% interest per MONTH. so the year APY would be 72%. (not for me)

[Derek.Sheriff]

They just offered me $618.75 for 152 Washington silver quarters in the form of a simple 3 or 6 month loan. As of today, spot price is $29.92 per oz. So that would make the melt value of my coins $822.47.

$618.75 for $822.47 worth of collateral that is likely to increase in the next 3-6 months?

You can see that they are getting a great deal if I don't pay back the loan. On the other hand, if I pay back the loan in 1-2 months at their very low interest rate (low as far as pawn shops go that is), it doesn't seem like I'm paying all that much to borrow $618.75.

So IMHO, this seems like a pretty good deal when compared to local pawnshops, pay day check advance places and even credit cards that charge really high interest rates, given the fact that many of these same credit cards often punish you with outrageous fees and interest rate hikes if you are late with your monthly payment, even once.

Personally, I'm EXTREMELY reluctant to borrow money..ever. But Pawngo seems to me like it fills a legitimate money lending niche and might be a good option for those who hold PM's if they are in a tight spot between paychecks or some other expected payment and have no other choice. But I think they should be certain they can pay back the loan in a short period of time. Otherwise, they might as well just sell and get a much higher price for their PM's.

[ardorlan]

Yeah, I think pawngo is much better local pawnshops, but if your holding my PMs you should beable to give me an AWESOME rate (0.5%/mth or 6% APY), mainly if you only loan me 25 cents on the dollar. that is something I would be willing to do.