Are you in need of immediate cash? Is the pawnbroker you have chosen genuine? These are the questions that revolve in your mind while looking for a pawn broker or when you decide to take a loan. Do not you fear pawn brokers cheating you? To deal with all the issues related to pawn brokers, go through the article below.
Once you approach a pawn broker, you have two options:
– Take loan in exchange of something valuable like jewellery, or asset, etc.
– Sell the valuable item to the pawn broker and get money.
In most cases, people choose the first option. Although pawn brokers lend money in very short time, yet they charge you high rate of interests.
What Is the System of Pawn Broking?
Before consulting with any pawn broker, it is important for you to know how the system runs. Remember, there are so many wicked people that can make you fool.
- First, you give the item known as pawn or pledge to the broker. He will set a value for the item.
- If you are taking loan for the first time, he will issue you a ‘pre-contact credit information form’. To remain on the safe side, even if you are an old customer to the firm, it is wise to fill up this form.
- Next, you will be issued an agreement form to sign. Before signing, read the terms & conditions carefully and understand each word of it. Ask the pawn broker wherever you get stuck. Signing a half read agreement can land you in trouble.
- The agreement speaks of the tenure of the loan and the rate of interest that is to be charged. Generally, a period of six months is granted. But you are free to agree to less or more time.
- If it is not a part of the agreement, make sure that the pawn broker issues you a separate receipt. Keep that receipt safely. It is a sign of proof to show that you own the item.
- You are free to recover the pawn any time by paying the amount and taking back the item. If you fail to pay the loan within the set time, the pawn broker will not think twice. He will sell it to other customer and earn money.
- Ever pawn broker gives you a time of 14 days. Within 14 days you can withdraw from the terms and conditions of the agreement. But you will need to pay the rate of interest for 14 days.
Pros and Cons of Pawn Brokers
Everything has its own prons and cons and so does pawn brokers have. First, let us have a look at the advantages of pawn brokers?
- The first and most important feature that separates pawn brokers from any other money lending organizations is that it is a fast method. The money you ask for loan will be given then and there.
- When credit rating is low, it is easy to borrow money from a pawn broker. There are lesser credit checks.
- Borrowing from a pawn broker, you can pay back the money and get your items any time. The interest is charged only upon the time in which the money is borrowed.
- What if your given item is sold? At such a time, the pawnbroker will not bther you further.
Now Let’s Know the Disadvanages of Pawn Brokers.
- Taking assistance from a pawn broker for borrowing money can be a costly affair.
The money borrowed from a pawn broker is limited. Say for example, if you want to borrow in exchange of a jewellery costing £200, you will get an amount of £100 approximately.