Individuals can sell their valuables to a pawnbroker or leave something valuable with them (e.g. security for a loan). For example, you can leave an antique or jewelry with a pawnbroker. Pawnbrokers have a reputation for lending money quickly. However, they also charge higher rates of interest. In fact, those rates are higher than street banks.
What is a Pawnbroker?
Pawnbrokers refer to individuals that lend money, and in return, acquire valuables that he or she can sell at a later time. They have the rights to sell those valuables if the client does not pay an agreed amount of money within a certain timeframe. Pawnbrokers often give their clients a Pre-contract Credit Information form. You should always ask for this. Another important document is the credit agreement. It states how long the loan lasts (typically a minimum of six months) and the final cost.
What do Pawnbrokers Accept as Pawns?
As long as the item can be re-sold, the pawnbroker will most likely accept it and extend the loan that you have requested. Pawnbrokers accept a wide range of jewelry, designer handbags, vintage/exotic cars, and many more.
Why Do People Use Pawnbrokers?
Some individuals approach pawnbrokers because they possess a poor credit rating. It might be easier for them to borrow from a pawnbroker as there are fewer credit checks. In addition, the pawnbroker may release the money on the same day.
A word of caution: Overall, using pawnbrokers can be a relatively expensive method to borrow money. Additionally, you only get to borrow a percentage of the pawned item's value.