How to find a Reputable Pawnbroker
If you are looking for a loan to help you resolve a short-term cashflow problem, a pawnbroker could be an option. When you pawn an item, you are putting it up as security against a loan. You typically have 6 months to pay off the loan plus interest and charges, and can then reclaim your item. A list of UK pawnbrokers can be found on SearchMe4, the UK?s leading business search engine.
The advantages of borrowing money from a pawnbroker are that it is quick and easy ? because you are securing the loan by leaving an item of value with them, the pawnbroker does not need to carry out a credit check, as a bank would do. This form of borrowing is therefore often attractive to people who have been rejected as too risky by high street banks.
The disadvantage is that the interest rates charged by pawnbrokers can often be significantly higher than banks would charge ? it is not unusual to be charged up to 3% per month. This means that it is more suitable for short-term loans that will be paid off quickly ? there are no early-redemption penalties so you can pay off the loan as soon as you are able.
As with any secured loan, always remember that you could lose your pawned item if you fail to pay back all the money you owe by the agreed date. If you fail to pay, for loans of under ?75 the pawnbroker takes ownership of your item. For higher loans you should be given a notice period to find the money, and even then it is usually possible to extend the agreement by paying off the interest owed. Most pawnbrokers would prefer not to have to sell pawned items as they rely heavily on repeat business ? indeed some customers return time after time to pawn the same item.
Pawnbrokers have been around for over 3000 years, with the earliest examples occurring in China. In the 15th century the Medici family of Italy started the modern version of pawnbrokers, and in the UK, the industry flourished in the 19th and early 20th centuries when you could see shops on every street corner. There has been a resurgence in recent times, with the economic downturn and credit crunch encouraging new customers to turn to pawnbrokers, having been turned down by the high street banks.
A search for pawnbrokers on a UK online business directory such as SearchMe4 reveals hundreds of examples, ranging from independents to nationwide chains, and including not only the traditional pawnbrokers, but also "buy-back" shops, who trade in second-hand goods but give you the option of buying back your item within an agreed period. Many pawnbrokers are attached to high street jewellers ? the businesses share many features, such as the need to accurately value pawned items, to provide secure storage, and access to second-hand markets ? gold jewellery and watches comprise the majority of pawned items today due to their tendency to retain their value, ease of valuation and storage, and because they are luxury items that people can do without for a period of time.
All pawnbrokers are regulated by the Consumer Credit Act 1974. In terms of finding a reputable pawnbroker, the National Pawnbrokers Assocation insists that new members satisfy the following requirements ? a consumer credit license, security, insurance and compensation as well as the knowledge required to value goods, and the necessary funding.
When borrowing from a pawnbroker, you should be given a copy of the contract, which should clearly state the length of the agreement, the interest rate, the amount borrowed, and any extra fees that may be charged. You will need to keep your pawn ticket in order to redeem your item.
If you are looking for a pawnbroker in your area, why not use the UK business search engine provided by SearchMe4. The free business directory lists local and national businesses according to category, and you can also search by location, entering either your postcode or nearest town. Just visit www.searchme4.co.uk to start your business search.