Pawnbrokers

Pawnbroking has been used since the 13th century as a way to raise funds quickly and conveniently when traditional methods such as taking out a bank loan is either out of the question or not desirable.

While the principals are much the same as they have been for centuries, the business has done a lot in recent years to distance itself from its Hollywood image of back street shops full of shady deals and stolen goods. Nowadays the industry is regulated and in most cases you will need photographic ID before they will do business with you.

The beauty of using a pawnbroker is that you are not tied down to a repayments plan. You simply pay back the loan plus the agreed amount of interest anytime within the term of the loan and you get back the item you pawned.

Because you are securing the loan with an item of value that exceeds the amount you borrow there are no credit checks, employment questions etc. This makes pawnbrokers extremely attractive to anyone needing to raise some urgent cash quickly and quitely.

While most people associate the industry with jewellery, there are more and more pawnbrokers who will accept anything of value including cars, motorbikes, electrical goods, fine art, boats and yachts – if it is of value, you will be able to find a pawnbroker who will do business with you!

There are exceptions of course but on the whole the interest you will pay for a loan with a pawnbroker will be far less than what you will pay for a payday loan or even a logbook loan which in reality works on the same principal.

We found interest charges as low as 5% per month when we did our pawn shop reviews which equates to 70% APR. Compare that to the 4214% APR Wonga charge and you can see why pawnbrokers are making a comeback.

The reason for the huge discrepancy though is that your loan with a pawnbroker is secured on the item you pawn. This means the lender cannot lose out. If you fail to repay the loan within the agreed period the item you pawned is sold so the lender can recover his money. With a payday loan the lender has no such security so when someone defaults they have to pay costs to retrieve their money or right it off. Either way, those costs are passed on to all customers.

You can read our reviews of the many pawnbrokers by following the links below.