the process of pawning and how it benefits both people
In: Economics
So lets say I need some cash quickly and don’t have access to other means of credit. I take something valuable to the pawn shop, the owner ascertains whether my valuable is actually valuable, and for how much. I think when I pawned something back in college, I had the option to sell my item outright or to pawn it, in which case I’m loaned money for a period time (30 days, I want to say?) and when/if I pay that amount of money plus interest within the time frame, I get my item back. If I don’t, the shop keeps my item. The item is the collateral securing whatever amount of money I was given. If the loan is paid back, the owner benefits from making interest on the money loaned me. If I don’t pay the loan back, the owner benefits by getting something he can keep and sell to recoup the loan plus however much extra. I as the person pawning something because I have access to credit when I wouldn’t have otherwise due to lack of credit or bad credit.
Latest Answers