Pawnbroking loans are short term, high interest loans against goods of value.
A pawnbroker will assess the value of an item and generally make the offer of a loan on that item for markedly below what they believe they could sell it for. This item will be safely stored by the pawnbroker for no less than three months. The customer then has the opportunity to return, pay the loan amount plus the interest, and have their goods returned to them.
What makes a Pawnbroking loan different?
There is only one consequence of not repaying a Pawnbroking loan. Unlike a more mainstream loan; if you cannot or do not repay a mainstream loan, you will start to receive harassing phone calls, letters of demand, have your credit score tarnished and find yourself pursued by debt collectors or even end up in court.
However, the consequence of not paying a pawnbroking loan is simple, you lose the item that you have already been without for over three months.