So’ What is a Pawnbroker
The Origins of pawnbroking can be traced back over 3,000 years to the chinese, but the industry as we know it today can be traced back to the noble Medici family who were a dominant financial power in the fifteenth century.
Pawnbrokers historically were portrayed as a last resort lender, however, this has changed over recent years and pawnbrokers are now seen as the alternative lender fitting into the mainstream of lending and filling a gap that the banks don’t.
Pawnbrokers offer speed and convenience over the bank, with customers now seeing pawnbroking as a “First Choice” rather than a last resort.
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
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 a charge or a fee involved. A Pawnbroker lends money based on a percentage of what he perceives to be the value of the item the person brings in.
Even though Pawnbroking loans are short term, there is still a small amount of legal paperwork to be completed, including reports on all the collateral received; which may be passed onto the police if requested, But pawnbroking provides a lending venue that is different from the bank, Pawnbrokers offer speed and convenience, a short term lending vehicle 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 jewellery or a luxury item that you would like to use as collateral for a loan with us, you can either make an appointment to visit our offices or if its inpractical we will try and come to you. We will examine your item carefully in order to determine its value. 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!, “Uncle or Auntie” as they were known by, were on every street corner lending $20.00 + on small items, where you could walk in with your work boots, television set and Lawnmowers, and walk out with your $20 Bucks, and this all conducted in full view of the General Public, this type of Pawnbroker still exist, and you can still see them on the main street of nearly every town or city.
Today there is a new breed of pawnbroker, who have taken pawnbroking to a whole new level, they glady offer private & confidential services operating out of offices and will lend you anywhere from $1,000 to $500,000 on your Ferrari or Designer Handbag or Rolex.
So’ who uses The Services of a Pawnbroker?
Traditionally it was low income earners you would have seen in the 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 last 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 their lending criteria and not lending short term i.e.( 1 day -3 months).
The middle and upper classes are not exempt from this with more electing to use a Pawnbrokers services, for speed and convenience, especially the small business sector who need that quick cash flow for a month or two for the Payroll or the Tax bill they haven’t catered for, until that 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 $6000 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 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 that new car from the dealer, 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?
Pawnbroker loans are for around three months in duration, but some Pawnbrokers will let you extend if needed. Either way, you can pay (redeem) it early with no penalty.
So there you have it! 7 things you need to know before using a Pawnbroker, brought to you by ‘Premier Pawnbrokers”
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,