Pawn shops have been around for more than 3,000 years in one form or another. Although local pawn shops may provide services that are quite similar to those of the modern banking institutions, pawnbrokers today indeed, serve as a more convenient way to raise instant cash, not only in London but all over the world. However, if you have never required using the services offered by trustworthy pawnbrokers London, you are possibly unaware of the significant benefits of pawnbroking.
For many years, families and also, business owners are heading to local pawn shops for obtaining secured collateral loans that meet their short-term financial needs. While pawnbroking is a well-lit and legitimate business that serves people from all walks of life, you can opt for a pawn loan in a hard-up situation by pledging anything valuable you own as collateral with your trustworthy pawnbrokers in London.
For those who are looking to take out a secure pawnbroking loan, take a look at these five things that you should know before walking into your local pawn shop:
- How do local pawn shops work?
Like many others, you may confront one problem in common from time to time – the need for fast cash. And, pawnbrokers possess a long and esteemed history of helping individuals in a financially distressing situation. When you visit a local pawn shop, the pawnbroker will assess your asset and offer you a credit loan based on its overall value in the current market.
However, the amount of credit loan your pawnbroker is willing to offer will also depend on many other relevant aspects of the item kept as collateral. Once you agree to proceed with the transaction, you will be provided with a credit agreement to sign. Your pawnbroker will then store your item safely in secured vaults until you repay the loan amount and the interest due.
The National Pawnbrokers Association regulates all pawnbrokers today, including pawnbrokers London. Besides, a pawnbroker is also required to acquire a trading license from the Financial Conduct Authority.
- How much money can you obtain against your asset?
Generally, customers obtain only a part of the asset’s retail value that you use as collateral. However, the credit loan amount you are likely to receive may vary depending on your asset’s condition, age, brand value and many other factors.
When you hand over your item to your trustworthy local pawnbroker, he/she will examine the asset precisely, looking at every fine detail that may add to its value. A pawnbroker typically assesses almost everything as long as an item carries some monetary value.
High street pawnbrokers in London perform many tests to estimate an asset’s nature, weight and also, to examine it for scratches or any other damages.
- What rate of interest will you have to pay on the pawn loan?
Although the interest rates may vary from one pawnbroker to another, it is much less in comparison to payday loans, bank overdraft fees, or credit card fees. Moreover, unlike bank or credit card late fees that typically affect one’s credit history, a pawn loan will never hurt your credit score if you fail to retrieve your pledge on time.
- What do you need to get a pawn loan?
Unlike banks or other conventional money lending institutions, local pawn shops lend money without obligation.
To obtain a pawn loan from any trustworthy pawnbrokers London, you will merely need an asset of value to use as collateral and proof of identification to reach an agreement. Your pawnbroker will not carry out any credit check, nor ask for a bank account details or a co-signer before providing you with a credit agreement to sign.
- What happens if you do not repay your loan?
With a pawnbroking loan, you will get a substantial amount of time to come back and reclaim your asset. However, the maximum tenure of a pawnbroking loan is usually six to seven months. You are permitted to retrieve your asset whenever you wish within your loan term. You will only have to pay off the original loan amount along with the due interest to reclaim your pledge. But:
If you do not retrieve your asset after your contract expires, your pawnbroker can do two things:
One, he/she may help you to extend your loan term, getting you a new deal and more seven months to repay the loan amount. You will only have to pay off the interest of your original loan period.
Second, the pawnbroker may sell your item to recuperate the debt.
Thus, if you own anything valuable and want to raise instant cash, begin your search online now and decide on the most trusted pawnbrokers London to secure a collateral loan with no obligation and hassle.