So’ What is a Pawnbroker
Pawnbrokers over the years have been portrayed, for the most part as a shade above loan sharks, is this justified portrayal? Yes there are thieving pawnbrokers just as there are thieves on Wall Street, The London Stock Exchange and other Global Organisations, who make their millions by unethical and illegal means whose actions should not be judged morally, Pawnbrokers are not given the same treatment however.
Pawn-broking, Pawnshop, Pop, Hock, Pledge no matter what you call it, it’s possibly the second oldest profession!! the plain simple truth is that its collateral lending.
How Does Pawn Broking Work – Collateral Lending
Contrary to popular belief, a Pawnbroker isn’t there to steal your stuff. In fact the Pawnbroking Industry around the world is so extensively policed that some large corporations have less regulatory laws, in comparison. The Pawnbroker first and foremost, lends money, this is based on collateral and this is the main way he derives income and Just like any other finance when the times come to repay the loan there is interest and possibly fees involved. The Pawnbroker lends money based on a percentage of what he perceives to be the value of what the person brings in.
Even though Pawnbroking loans are short term, there is still legal paperwork to be completed, including in-depth reports on all the collateral received; and this may be passed onto the police if requested, to avoid stolen items. This naturally translates to a higher interest rate than traditional banks, but Pawnbroking provides a lending venue that is different from the bank, Pawnbrokers meet short term lending that the banks don’t, and is available to a greater segment of the society than banks.
Let’s say you have a piece of jewelry or a luxury item that you would like to use as collateral for a loan with us, you will need to make an appointment to visit our offices. We will examine your item carefully in order to determine its value. Once we examine your item, we will offer you a free no obligation evaluation. This appraisal will give you important information about your item’s characteristics and history. We will then offer you a fair cash loan.
Are All Pawnbrokers The Same
Good Question!, Traditionally Pawnbrokers were seen to be on every street corner lending $20.00 + on small items, where you would walk in with your work boots, television set and Lawnmowers, and walk out with your $20 Bucks, and this all done in full view of the General Public, these types of Pawnbroker still exist, and you can still see them on the High Streets of nearly every town or city, but now there are Pawnbrokers who have taken Pawnbroking to a different level, by offering Private & Confidential services in offices who will gladly lend you anywhere from $1,000 to $100,000 on your Ferrari or Designer Handbag or Rolex. Some will even do home visits!
So’ who uses The Services of a Pawnbroker?
Traditionally it would be low income earners you would generally see in a Pawnshop, people who were on day to day casual work, those who needed quick cash to pay that unexpected utility bill until the next pay cheque came through, however since the Global Financial Crisis more and more people from all walks of life are turning to the services of a Pawnbroker especially with the banks tightening lending criteria and also not lending short term i.e.( 10 days -3 months), The middle and upper classes are not exempt from this with more and more using a Pawnbrokers services, especially the small business sector that need that quick cash flow for a month or two for the Payroll or that Tax bill that they haven’t catered for, until that big receivables cheque arrives.
An example of this is The Business owner who recently sold the Business and had not accounted for the last GST, therefore needed $1500 for a few days until the sale went through.
How Much Can I Get?
This very much depends on the collateral you are using, let’s say you’re using a piece of Jewellery or a luxury item, the Pawnbroker would offer you a percentage of what it’s market value would be, so if you didn’t come back to redeem it, he would be able to on sell and recoup his money.
What is “market value”?
Not all costs are created equal. When you buy a piece of jewellery from a high street jeweller, or a car from Mercedes, you’re paying the retail price. If you decide to sell that ring or that car today, you’ll get the market value not the “replacement value.” The difference is what’s called “depreciation” – and it covers the mark-up the dealer has, their rent and overheads and that nice espresso they give you. The relationship between market value and the retail cost varies by item; in the case of jewellery, you can figure that anywhere from 30% to 60% of the retail price walks out the door with you.
Is there a maximum or minimum loan period?
Most Pawnbroker loans are for around three months in duration, but some Pawnbrokers will let you extend if needed. Either way, you should be able to pay it early with no penalty.
So there you have it! 7 things you need to know before using a Pawnbroker, brought to you by ‘The Pawnbroker”
There’s an old English rhyme, you may have heard it?
Half a pound of tupenny rice
Half a pound of treacle
That’s the way the money goes
Pop goes the weasel
To “pop” is the English slang word for “pawn”. Weasel is from “weasel and stoat” slang for coat. It was traditional even for the poor to own a suit, which was worn for “Sunday best”.When times were hard they would pawn their suit, or coat, on Monday and claim it back before Sunday.
We hope that this has given you a little understanding of what a Pawnbroker is and how they work,