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.
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.
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.
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.
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.