Lombard is an institution that grants loans against collateral. It owes its origins to Italian bankers who have been active since the Middle Ages. Due to the properties of this place, loans have been introduced that are granted as collateral for movables or securities. With this in mind, let’s try to answer a few questions related to this form of borrowing. What characterizes online pawnshop? Is it possible to borrow a loan without a pledge? What do we need to know when deciding on such a form?
Loans at the pawnshop – the most important information
Pawnshop loans are extremely popular, mainly due to their short repayment terms. Most often, financial assistance is granted for a period of seven to thirty days. Therefore, the offers (also those online) are most often used by people who need fast cash, while having the ability to pay it back quickly.
To obtain such a loan, we must pledge the item in the pawnshop, which does not remain the property of the pawnshop, but provides assurance about the cooperation that has been undertaken. It is important that the pledged item must be stored properly so that after repayment of the loan the item returned to its owner intact and secure. We can allocate min. jewelry, electronic equipment, home appliances or electronics, works of art and all movables.
We will receive a pawn loan in pawn shops, but also at the bank. In the case of the latter, vouchers, PKO books or the same funds on the account become the collateral, which are blocked for the duration of the contract. Some banks also accept valuables in the form of precious stones and jewelry.
In addition, the loan at the pawnshop is related to the fact that for the item left (i.e. the pledge) we receive only 30% of its value. This is due to the desire to secure the pawnbroker and the chance for additional profit.
Contract and loan at a pawnshop
When deciding on a loan at a pawnshop, we must remember about the need to draw up a relevant, binding contract. This document is necessary, providing both parties with the cooperation, while being a valuable safeguard. A properly prepared contract should contain such information as:
- details of the borrower’s customer
- amount of loan taken
- form of pledge and a full description of the subject to be secured
- loan repayment date
- loan repayment form
- fees resulting from any debt (the commission depends on the loan value, repayment date and other conditions)
- the value of the subject against the security
- the signatures of both the pawnshop and the borrower
What if I don’t pay my loan back on time?
If the borrower is unable to pay the debt, he loses the item that previously served as a pledge. This item automatically becomes the pawn shop property and goes on sale, thanks to which it can be enriched. Pursuant to this principle, a provision was made stating that such loans are forbidden to the family members of the pawnbroker owner. What is also important – the loan amount cannot exceed the maximum value of the set.