Why would someone go to a pawnshop to get a loan?
WHEN THE BANK SAYS NO Pawnshops offer the consumer a quick, convenient and confidential way to borrow money. A customer receives a percentage of the value the broker believes the collateral would bring in a sale. Although the loan to collateral ratio varies over time and across pawnshops, a loan of about 50 percent of the resale value of the collateral is typical. In other words, pawnbrokers feel their loan is “paid in full” at the time it is made. Most states regulate pawnshop interest rates and other charges, such as storage or insurance fees. What is the foreclosure procedure? If a customer defaults, the collateral becomes the property of the pawnshop after the loan is overdue by a specific amount of time (in NYS the pawnbroker must mail you a notice of the defaulting pledge). You must redeems your pledge or extend it by paying the interest due within the stipulated grace period. In case of default, some states require the collateral be sold at public auction. Thirteen states and th
Pawnshops offer the consumer a quick, convenient and confidential way to borrow money. A customer receives a percentage of the value the broker believes the collateral would bring in a sale. What is the foreclosure procedure? If a customer defaults, the collateral becomes the property of the pawnshop after the loan is overdue by a specific amount of time (in NYS the pawnbroker must mail you a notice of the defaulting pledge one month prior to the actual default date). You must redeem your item before or on the due date OR extend it by paying the interest due and get another 4 months to pay your loan (5 months total since you receive a notice of default date warning one month prior to default date.) Do most pawning customers lose their merchandise? The national average 70 to 80 percent of all loans are repaid, at US pawnbrokers our average is 85 to 90 percent. Pawnbrokers offer non-recourse loans, looking only to the item being pledged to recover their investment if the borrower chooses
