Pawnshop: How does this type of loan work?

 The pawnshop is one of the oldest forms of credit. It has existed for over 2000 years in China and was established in Europe in the Middle Ages.

Pawnshell is a loan obtained after the deposit of property as collateral. The amount of this loan is proportional to the value of the property deposited by the borrower. The lender then retains the property as his own property or can even sell it if the borrower has not kept his repayment commitment within the time stipulated by the contract.

In which case should you ask for a pawnshop?

In which case should you ask for a pawnshop?

In practice, a pledge loan application is less restrictive than a conventional loan application. Like a personal loan without a credit check, the loan application can be very fast. This is why it can be useful when a fast money loan especially if the applicant already has several credits in progress.

In addition, part of the attraction of this quick loan is that you do not want to know why you need this money. The object can be claimed at any time within the period specified in the pledge acknowledgment, subject to full repayment of the loan, plus interest, service charges and storage.

How to apply for a pawnshop?

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The filing procedure is the same everywhere in Canada. There are many businesses willing to lend on pledge in Canadian cities. The pawnbroker asks the person how much they would like to borrow. If it accepts the object it puts in warranty, it makes a quick estimate. He then indicates the amount he is willing to advance and gives the client a pledge. In most cases, this loan will not exceed 25% of the value of the object left as collateral.

Which objects can be used as part of a pawnshop?

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The consumer can come with one or more goods. These goods are various objects and whatever their value. That’s why they are often a collection of heterogeneous objects. However, in Canada, pawnshops are increasingly specializing in precious metals.

Is the consumer well protected?

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With a bad reputation in the past, potential applicants may have some reluctance towards this loan. However, there is now a law on consumer protection. It does not contain only civil penalties, because the Office of Consumer Protection can, under this law, prosecute traders who do not comply with the law.

For example, according to this law, pawnbrokers must disclose to the credit agreement the annual credit rate they charge and not just the monthly interest rate. In the past, this part of the contract was frequently forgotten.

How to choose your pawnbroker

How to choose your pawnbroker

 

The Consumer Protection Act requires pawnbrokers to hold a license. Yet, today, many pawnbrokers still do not have an official license. We advise any applicant to check the validity of the lender’s license and to remain particularly vigilant. The pawnshop can be a very good alternative to other forms of personal loan for bad credit or payday if it is studied carefully.

The pawnshop is a good formula for an urgent loan of money and when you already have several credits in progress. The steps are particularly simple and the deadlines are very short. However, it is imperative to think carefully to study the legality of his lender and the confidence that we have towards him.