Pawnshop: What's this?

In the current conditions of the financial crisis, many people are in urgent need of a shortage of money. Realizing that there is a certain amount of money for an urgent purchase, most apply for a bank loan or borrow from friends and acquaintances. But there is another category of people who go to the pawnshop for a loan on bail of jewelry or other valuables. They rightly believe that a pawnshop is The best opportunity to quickly get a short-term loan. After all, not all have additional sources of income or generous relatives who are able at the right time to provide financial assistance.

What is a pawnshop?

Those who do not know what material difficulties are, can hardly understand why people go to pawnshops. Of course, if a person urgently needs money and there is no one to lend, you can sell something out of things. But not everyone wants to part with your favorite things, and then people give them as collateral with the option of subsequent repayment.

Lombard is a legal commercial institution, whose activity is based on mortgage principles. Here everything is quite simple: a person who needs money, in exchange for a certain amount, leaves his value as collateral. Upon completion of the agreed terms, the mortgagor has the right to redeem his property, having paid for it the amount received earlier and interest accrued during this time. As a pledge, you can leave only personal things, including precious metals, household appliances, vehicles, electronics and jewelry. Recently, the so-called pawnshop of watches became very popular, giving the opportunity to profitably lay or sell an elite Swiss watch.

What do we give and what do we get?

You can get money only for things that are of a certain value. The amount of cash given out by a pawnshop is determined taking into account the real value of the collateral provided. Obviously, the estimated cost will be several times lower than the amount that you paid, acquiring the surrendered property. Before you put your favorite thing in the pawnshop, you need to think it over carefully. After all, in case of failure to pay the stipulated amount of the pledger, the institution will have to sell the collateral, and this is fraught with a lot of running costs. So do not be naive to expect that for your brand new tablet worth $ 500 you will get at least 400. In reality, the amount will be much less, and in different pawnshops the estimated value of the same thing can differ significantly.

When you return the collateral, the borrower will have to deposit not only the amount received earlier, but also a certain percentage. Terms of payment and the rate for using money in different pawnshops can be very different, and this needs to be known in advance. It is worth noting that the percentage is quite high, therefore it is profitable to cooperate with such institutions only in case of a short-term loan.

Pros and cons of applying to the pawnshop

One of the main advantages of going to a pawnshop is the speed of the deal. To get the required amount, it is enough to have some value and a passport. The processing of documents takes no more than half an hour. The second argument in favor of such cooperation is accessibility and simplicity. This is especially true for people working without official confirmation of income or having a bad reputation in banking institutions.

In addition to the above pluses, working with pawnshops has a number of significant shortcomings, one of which is the high interest rate charged for using the loan. However, if it is a short-term loan, the amount will not be too high. In addition, pawnshop technology Does not issue large loans.

Rights and obligations of the borrower

To use the services of a pawnshop, you need to provide not only collateral, but also a passport. Upon completion of the evaluation procedure, a contract is concluded with the client. The mortgagor receives cash and a pledge ticket - a document that allows him to redeem the thing left. It must specify the address of the pawnshop, who and to whom the ticket was issued, the description of the pledged property, the amount received by the client and the terms of its return.

If the client does not redeem his item after the agreed time, within one month after the contract is concluded, it becomes the property of the institution.

How to get money without becoming a victim of deception?

Before entering into a contract, you need to make sure that the pawnshop has all the permits. There must be money on hand. Their absence should be the reason for refusing to deal with such an institution. An important role is played by the level of work and furnishings of the pawnshop. Many modern institutions have payment machines.

In addition, one of the common tricks to which an unscrupulous pawnshop goes is an increase in the interest rate. Therefore, it is very important to read it carefully before signing the contract.