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Why a pawn shop?
Applying for a loan at a regular bank is currently considered the most successful solution for all people and, moreover, the most familiar. However, not all people can do this with all their desire, and there may be a sufficient number of reasons for this.
In this case, a person begins to look for an alternative to existing credit systems, and the first thing he pays close attention to is organizations that issue small amounts. They are called microfinance. For some time, they began to carry out their activities strictly according to the law in force on the territory of the state. But not every person decides to use their services, despite the attractiveness of the conditions for obtaining funds.
There is such a category of citizens who prefer all other ways of receiving money pawnshop, primarily due to the high speed of obtaining the desired amount. Their percentage is not too high.
As per the law
In general, there is a generally accepted opinion that every pawnbroker has the right to set the interest rate that suits him. This is true, but limitations in this matter are still present. The website of the state regulator provides Internet users with information about the average market value of loans in pawnshops in full. At the same time, any of the pawns should not exceed the specified values by more than one third.
How beneficial is the pawn shop for the borrower?
The vast majority of pawnshops that can be found on the territory of our country set interest rates that successfully fit into the values set by the above-mentioned regulator. If you compare pawnshops with organizations of the microfinance sector, it becomes quite obvious that the benefit of the former is, moreover, to a significant extent.
When a person does not have free time at all, if he is very busy, it is easier for him to contact the MFI. The fact is that getting money from a pawnshop requires a visit to the pawnshop, and property appraisal takes a certain period of time, which many do not have. Another important aspect is that not every person has property that is sufficiently valuable.
In addition, one should remember the fact that the creditor in the pawnshop will never give the full value of the brought value. Most likely, the amount will be less than a third of the real price, and sometimes it can even be a third of the cost.
When lending in a pawnshop, an agreement must be signed. It is very important to read his points carefully, especially those written in small print. There are no small details in such an agreement, and everything needs to be carefully studied so that the terms of the loan are not a surprise for the borrower later.
Nuances of debt payment
In any agreement, first of all, the terms by which the debt must be paid are prescribed. Various situations occur in life, including those where the borrower cannot pay on time. In this case, the pawnbroker can meet and extend the time. Of course, there will be interest during this period, but the person can pay off and also get back ownership of the property pledged to him.
