Loans in a pawnshop are loans granted against securities, shares or bonds. The form of security may also be objects of a utilitarian nature, such as jewelry, works of art or electronic equipment
Loans at the pawnshop - basic information
Loans in the pawnshop are characterized by a short repayment date. They are usually given for a period of seven to thirty days. During this time, the object pledged is in a pawnshop, but it is not his property.
What is important, it is the responsibility of the pawnshop to store the pledged goods in a proper manner so that after repayment of the loan it will return to the owner in an unprocessed state. It is obvious that the pledged item must represent a certain value to make it an attractive security feature. It can be jewelry, electronic equipment, works of art or household appliances.
Getting a loan at the pawnshop precedes the preparation of the relevant contract. The document must contain information such as:
- customer data,
- the amount of the loan granted,
- a form of a pledge and an exact description of the item being secured,
- loan repayment date and its form,
- fees related to debt service,
- the value of the pledge,
- signatures of both parties to the contract.
If the borrower does not return the debt on time or does not want to extend the repayment date, the pledge becomes the property of the pawnshop and goes on sale. According to the current legislation, information about the loan at the pawnshop will not be given even to the members of the immediate family. An exception to this situation is the one in which the owner of the pledge agrees. It is worth seeing that the amount of the loan granted can not exceed the maximum value of the pledge. The loan repayment date and all related costs are set between the client and the pawnshop and are included in the loan agreement. The amount of the commission depends on the loan amount, its repayment date and the value of the pledge itself. Both the borrower and another person authorized by him may make a repayment. When paying off the liability, the borrowed amount must be returned with the commission by the day indicated in the contract.
A lombard loan can also be obtained from the bank. Such a loan may be secured by vouchers and PKO books or by blocking funds on the account. The form of security accepted by the bank is also such valuables as gold, jewelry or coins.
What can be pledged in a pawnshop?
Lombard is an institution that grants loans against collateral. Its name comes from Italian bankers operating in Western Europe at the end of the Middle Ages. The borrowing of money itself also has a long history. An interesting fact is that in the interwar period, pawnshops were called mortgages, which perfectly illustrated their function.
In a pawnshop, we can place virtually any item that represents a certain value. The most commonly pledged goods include:
- electronic equipment, ie computers, laptops, tablets and telephones,
- household appliances,
- family heirlooms of considerable value,
- gold and coins,
- consoles and computer games,
- antiques, paintings, sculptures and other works of art,
- sport equipment,
- other movable property.
The subject of the pledge may also be securities, shares and bonds. There are also loans granted against the car. What exactly forms of pledging the company accepts is not pre-determined and depends only on its internal policy. In practice, we can pledge any item that the pawnshop will agree to accept. Before we get a loan, the determined property will be valued by the appraiser, which will allow to determine the value of the object pledged. It is worth knowing that making a valuation does not oblige us. If we disagree with it, we can look for another pawnshop that will offer us better conditions.
Loans in the pawnshop are usually used by people who quickly need cash. This form of obtaining additional funds fills a gap in the current financial system and is an alternative to, among others, for non-bank loans.
When deciding on a loan at a pawnshop, we must reckon with the fact that we will receive only about 30% of its actual value for the pledged equipment. Of course, it is worth choosing a pawnshop that will offer us the highest value of the pledge. In addition, the loan we return will be higher by the interest added to it.
Loans in a pawnshop - are they safe?
The rules on which loans are granted at the pawnshop make it a safe way to obtain additional funds. The basic condition that we must meet to obtain a loan at a pawnshop is to have an ID. To make a contract, you must show your ID card, driving license or passport. It is equally important that the object to be protected is our exclusive property. You will need to provide proof of purchase or ownership, so that pawnshop employees can be sure that the item does not come from the theft.
As in the case of non-bank loans, we can also use the extension of the repayment period. However, this involves additional fees. In addition, the extension of the loan agreement entails the subsequent collection of the pledge. It will take place when we repay the loan in full.
If at the moment we are unable to pay our debt, we can partially pay off the loan. In this case, the liability will be lower by the amount paid. We will also be able to collect part of the pledge adequately to the valuation made by the pawnshop. If, on the other hand, we intend to pay off the loan ahead of schedule, we should inform the lender accordingly in advance.
How to choose a good pawnshop?
Before we decide to get a loan at the pawnshop, let's check the credibility of the entity. It is worth choosing a pawnshop of unblemished reputation, enjoying the trust of customers. Let's also get acquainted with the rules on which he grants loans. These may vary slightly depending on which of the services the pawnshop we decide to use. It is important what opinions he enjoys. Let's also ask how the pawnbroker stores the items entrusted to him. Let us pay attention to the form in which we will get a loan and ask what costs are related to it. What should be particularly interesting to us is, among others the amount of the commission, the possibility of extending the repayment date or giving the loan ahead of schedule. Let us make sure that the pawnshop takes care of the security of the customers' data and that it keeps the secret of the contract. Let's also ask if the return of the loan can be made by the person indicated by us.
Loans at the pawnshop. Summary
Loans in a pawnshop are a special type of loans offered against pledges. We can take them in virtually every pawn shop, because these entities operate throughout the country. Their advantage is that we receive them immediately, on clear and transparent terms. The disadvantage of this type of financial support is high costs and significant understatement of the value of the object pledged. The amount we get depends primarily on the value of the item being the form of collateral. Let's also remember to check the repayment date. If we forget about the return of the debt and we do not contact the pawnshop, the movable property will become its property.