Pawnbroking – A Simple and Straightforward Way To Access Funds
If you need some money and have something of value that you can use as security, then pawning it will often make a great deal of sense. Pawnbroking shops used to be a common sight on the UK’s high streets but they are not so familiar nowadays. That said, plenty still operate both in-person and over the internet where luxury goods like jewellery, designer watches and even works of art can all be assessed.
According to Bonds of Brentwood, a reputable and long-standing firm of pawnbrokers in Essex, many people now make initial contact online and then come in to have their loan arrangement finalised face-to-face. If you are considering pawning something to access funds, then what do you need to know?
What Is Pawning?
A pawn is nothing more than a pledge. It is an old-fashioned way of saying that you pledge to repay the money you will be loaned by your creditor. The pawnbroker lends you money against the value of your item but also pledges to hold on to it for you so you have the opportunity to repay your loan and get your possession back. Typically, people pawn items of jewellery and luxury watches that may have sentimental as well as monetary value so this pledge needs to be taken seriously as a part of the deal.
How Much Can You Borrow?
This is between you and the pawnbroker. Obviously, you won’t be able to borrow more than the item(s) you are pawning are worth. That said, you could borrow a lower sum than it is worth so you are more comfortable with repaying the loan.
What Is the Term of the Loan?
Again, this will depend on the deal that is struck. The term of any loan usually relates to how long you have to pay it back. Typically, pawnbrokers offer terms of six months but this can vary. You’ll also be charged interest as a part of the terms of repayment. Once more, this will differ according to your personal circumstances and the rates the pawnbroker in question offers.
What If You Want to Back Out?
By law, pawnbrokers must offer their clients a 14-day cooling-off period. So long as you are within that timespan, you can pull out. You’ll need to repay the loan in full plus any interest that may have accrued to that point. If so, your pawned item(s) will be returned and the loan will be cancelled.
Why Not Borrow Another Way?
The fact is that there is nothing to stop you from obtaining credit without pawning items. However, pawnbrokers tend to be competitive compared to things like payday loans and personal finance arrangements. Shop around to see what is the best deal for you. Remember that securing your loan with something of value, such as a luxury watch or a ring, shows you are serious about repaying the loan and this should be reflected in the amount of interest that will be levied, something that can particularly benefit people with poor credit histories, for example.