Pawnshops are popping up all over the country and there are even shows airing about a few. Pawnshops are used for a great number of things including buying and selling items, pawning items, and giving out loans. Every pawnshop has some kind of policy for doing any of these and it is very unlikely there would be any exceptions to them. Most pawnshops have all the same, or very similar, policies, and the Johannesburg one is no different really. An introduction to pawnshop loans in Johannesburg may be just the thing to help you understand what all goes into a loan from a pawnshop. Pawn shops have come a long way from their old image of being places to unload stolen goods and are often brightly lit establishments that don’t appear any different from other retail stores. But consumers should still use caution when taking on personal loans that come with high rates of interest.
Let’s start on the topic of loans. The loans are known to be fast and easy to get for people in need. However, with how fast they are they can have a high-interest rate that will need to be paid off too. these loans occur when someone needs money and they then ‘pawn’ an item of value for it. For example, they need a few thousand and pawn a diamond ring. Before the item can be returned the person who pawned it would need to pay the original loan off and any interest it racked up. If you end up not being to pay it off the item is theirs and it will be sold. Generally, any loan a person receives won’t be anywhere near the market value for the item being pawned. Appraised values are used and in many cases, borrowers may be lucky to get 25% of the current retail price of their item. Some borrowers may be able to negotiate a better loan rate. In some cases, people may make out better trying to sell their items on eBay.
Policies were mentioned above and it is nice to know what they are for the specific pawnshop but in general, they all hold true. Pawnbrokers are required to give police a list of items that have been pawned to screen out stolen merchandise. Although pawn shops offer fast loans, they aren’t cheap. Pawn shop loans come with annual percentage rates that can be as high as 300% depending upon a state’s usury laws. For instance, New York limits the amount of interest that can be charged on small loans to 25%. Many pawn shop loans are for a period of 30 days. But borrowers can usually extend that period by paying a monthly storage fee. Interest will continue to accumulate as long as the item is being held.