How does Borrowing from Pawnbrokers Work

 

In the UK, pawnbrokers are a common sight on the main streets, but they now go beyond brick and mortar to provide online services too. So how do pawnbrokers work?

Well, you can sell your antique to pawnbrokers or borrow money depending on the worth of the property used as collateral. Keep reading to understand how borrowing from pawnbrokers works and what you can pawn.

 

What are Pawnbrokers?

A pawnbroker refers to a creditor who offers you a loan against your assets. They keep you asset as the loan security, which may be redeemed after you pay off the whole loan amount. Typically, pawnbrokers will lend you a percentage of the item’s total worth.

 

How Pawnbrokers Work?

When you want to secure a loan against your valuables from a pawnshop, here is how borrowing from a pawnbroker works. Visit a pawn shop with the item you wish to use as collateral. The pawnbroker will assess the item’s worth and inform you of the amount they are ready to lend you. Once satisfied with the amount, new clients are required to fill out a form titled "precontract credit information." Repeat clients might not receive the form but can still request it. 

 

The pawnbroker will ask for your ID to verify your identity and ensure you’re 18 years

old and above. You can then go through the contract and sign it. Typically, the contract will detail the cost of the loan and the loan term duration. You’ll be given a ticket that certifies you possess the item acting as collateral. You must keep this ticket secure because you have to show it to get your item back after repaying the loan.

To have your valuables back, you must present your ticket and repay the loan fully before the duration stipulated in the agreement expires. Normally, you’ll need to repay the pawn loan in a single instalment. However, some pawnbrokers accept weekly or monthly repayments.

 

Are Pawn Shop Loans Safe?

Generally, pawnbrokers are safe and offer guarded storage facilities and insurance for you items. However, you should ensure that you are working with a genuine and licensed firm. Pawnbrokers are licensed by the Financial Conduct Authority (FCA).

Therefore, you should verify that your pawnbroker of choice is on the FCA's registry before entrusting them with your valuables. Also, confirm whether the pawnbroker is a member of the National Pawnbrokers Association (NPA). The NPA establishes regulations that all of its members must adhere to in order to guarantee high standards and serve clients fairly. 

 

How many Loans Can You Get From a Pawnbroker?

A pawnbroker will lend you whatever amount you want provided you have adequate assets to act as security. High-street pawnbrokers may offer loans as low as £50, while specialised lenders can provide loans as much as £1 million against luxury assets or fine paintings.

 

Items That You Can Pawn

Almost anything of worth may be pawned. Some of the items you can use to acquire pawn shop loans include: 

• Jewellery  

• Electronics  

• Collectables  

• Guns  

• Game systems  

• Precious metals or jewels  

• Cars  

• Motorbikes  

• Musical instruments  

• Coins 

 

Pawning is a great way to get a quick loan. However, you must ensure you’re working with a credited pawnbroker to get the best deals and guaranteed security for your valuables. If you’re looking for quick cash, get in touch with the cuttings team for advice on taking out a loan against an item of value.