Pawnbroking is on rise due to financial crises
>> Thursday, April 30, 2009
Pawnbroking is on rise with struggling families as a result of financial crises. Let's learn about the definition of the term and some useful information about it.
According to definition of wikipedia: A pawnbroker (or pawnshop) is an individual or business that offers monetary loans in exchange for an item of value that is given to the pawn broker.
Few words about 'pawnbroking': Business of advancing loans to customers who have pledged household goods or personal effects as security on the loans. The trade of the pawnbroker is one of the oldest known to humanity; it existed in China 2,000 to 3,000 years ago. Ancient Greece and Rome were familiar with its operation; they laid the legal foundations on which modern statutory regulation was built.
With seven million people in the UK (having no access to bank or building society credit), pawnbroking is the fastest-growing part of the finance industry.
In a post at 'Debt free direct' 'Struggling families turn to Pawnbrokers' it describes some facts and figures for 'why people turn to pawnbrokers':
In the last 6 months of 2008, pawnbrokers Albemarle and Bond’s profits have increased from £24.9 million to £26.5 million.
There are no best-buy loans available at 7.9% per annum. Most pawnbrokers charge 3-5% APR per month on their loans. This is considerably cheaper than unsecured Payday loans where the figure is nearer 20% per month.
According to the National Pawnbrokers Association, approximately 88% of pledged goods are redeemed by their owners. Given the rate of interest and the fact that pawnbrokers are dealing with bad credit customers, redemption levels are good
More facts and useful posts/links:
* Pawnbroking on the rise
* National Pawnbrokers Associations
