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Paul

Pawnbroking in UK - A guide to " How It Works & What To Expect ""

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Thanks for the info Paul.  

I have used a Pawn Broker in the past for small amounts using gold.  I must of got good rates as i remember 45% APR  though as you said gold coins are easy money for a pawn broker.  Also I knew what the coins were worth to a bullion dealer and agreed what the % below spot the sale price would be if i failed to pay back the loan. 

The main thing is only take out a pawn if you are able to pay it back.  Sell if you are unsure if you could pay the loan back do not pawn. A pawn broker can be a good place to sell certain items and its quick.       

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I thought this was interesting, and I enjoyed learning about how this business works, so thank you for taking the time to share it!

The one thing that stood out to me, was that unless I missing something (could very well be the case 😊), it would seem that given such high interest rates, assuming one has a gold coin to pawn, it would be a better deal to sell it and then buy it back in the future, rather than borrow against it and then pay back a loan.  Even with the frictional costs such as dealer spreads and postage, it would take an enormous move in spot to make up for the cost of interest.  And that's not even accounting for the possibility of gold declining during the time you need the cash.

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12 hours ago, Lr103 said:

it would seem that given such high interest rates, assuming one has a gold coin to pawn, it would be a better deal to sell it and then buy it back in the future, rather than borrow against it and then pay back a loan.  

in most cases you are right, best just to sell to a bullion dealer

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14 hours ago, Lr103 said:

I thought this was interesting, and I enjoyed learning about how this business works, so thank you for taking the time to share it!

The one thing that stood out to me, was that unless I missing something (could very well be the case 😊), it would seem that given such high interest rates, assuming one has a gold coin to pawn, it would be a better deal to sell it and then buy it back in the future, rather than borrow against it and then pay back a loan.  Even with the frictional costs such as dealer spreads and postage, it would take an enormous move in spot to make up for the cost of interest.  And that's not even accounting for the possibility of gold declining during the time you need the cash.

You get hard cash quickly outside the banking system, if you need cash then the pawnbroker is the way to go! You then could get stock to sell quickly to make money in business! 

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Using a pawn broker will also not leave any lasting traces on your credit profile.  You are not credit searched prior to being accepted for credit

It doesn't get reported to Experian,  Equifax and TransUnion (formerally CallCredit) credit agencies.

The credit agreement you have is solely with the pawnbroker. It is baked in the cake equation, if you don't pay your loan back plus interest, the pawnbroker takes ownership of your item.

It has been reported on the likes of Money Saving Expert web site, that people have made use of Pay Day Loans in their credit history past has had negative affects on them when they have made application for mortgages, as in the lenders eyes a Pay Day Loan is not a sensible way to manage your finances, when applications have reached the underwriters & scrutiny stage

https://www.moneysavingexpert.com/loans/payday-loans/

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