You may one day run into financial difficulties causing you to need cash immediately. In this case, the constitution of a file for a credit application will not be possible due to the urgency, especially if you already have several credits in progress. There is, however, an alternative that could help you: it is the pawnshop. However, using a pawnshop can come with some risks. Let’s take stock of the subject.
The pawnshop is more and more considered by the people as an alternative to the bank loan, the banks being more and more cautious. But let’s see what this financial solution consists of, and the profession of pawnshop. A lot of enquiries can be made there.
The principle of the pawnshop
The pawnshop is a loan that a person receives after temporarily depositing an item of value with a pawnshop. This type of loan is used in several countries around the world. It is several hundred years old because it already existed in China 2000 years ago.
To put it simply, the pawnshop works like a mortgage, except that the loan is exchanged for something of value, allowing you to access cash without needing to own it. In Europe, the first establishment that lends liquidity after depositing a valuable object was established in the middle Ages in Germany. If pawnbrokers are much more popular in the United States, they can certainly be found in France. Now that you can have the best Best pawn shop rates in Melbourne you can enjoy for best.
Pawn shops in Melbourne
Although this loan system can be practiced between individuals, it is advisable to use it only by contacting a specialized establishment. The risk is that between individuals, the borrower can immediately lose his property if the repayment deadline is not respected. The legal monopoly in the area of pawn shops is held by the municipal credit unions.
Regulations Governing Pawn broking
It is the Monetary and Financial Code which governs pawn shops:
- The pawnbroker can only exercise if he has government authorization.
- In addition, the authorities are free to control establishments carrying out this type of operation.
- You should know that the object that has been deposited as a pledge always remains the property of the person who borrows for the duration of the loan.
Pawn shops can be a good solution for getting a short-term loan, but it comes with both risks and conditions.
How the pawnshop works
There are steps to follow if you want to get a pawnshop:
The appointment with a pawnshop: appointment with the Municipal Credit Bank of your municipality with an identity document, proof of address and the object that will serve as collateral for your loan . If possible, you should always bring proof of ownership to prove that the pledge belongs to you.
The expertise of your valuable item: this is carried out by a qualified expert. The loan that will be granted to you represents 2/3 to 4/5 of the value that the expert estimated of your object. To assess the warranty, its weight, its composition, its rarity, its brand, and therefore all its characteristics are observed.
The pawnbroker contract: if the loan is granted, a nominative contract will be established, the duration of which can range from 6 months to one year. The sum of money in cash, check or transfer, corresponding to the value of the object is then returned to you immediately. However, you can repay the loan before the agreed deadline and recover your item, without penalty.