Pawnbroker

From WikiMD's Wellness Encyclopedia

Leihhaus 20140220
Pawnbroker Oulu 20090906
Pawnbroker's sign, Camden High Street, London
Provident Loan Society Essex Houston jeh
Pawnshop with sign in usa
Pawn Shop at Sherman Way & Reseda Blvd., Reseda, CA

Pawnbroking is the practice of offering secured loans to individuals, with items of personal property used as collateral. The items having been pawned to the broker are themselves called pledges or pawns, or simply the collateral.

History[edit | edit source]

Pawnbroking has a long history, with its roots tracing back to ancient China, over 3,000 years ago. It spread to ancient Greece and Rome, where it helped to provide financial services to people who had limited access to banking facilities. During the Middle Ages, pawnbroking became more widespread across Europe, often facilitated by the Jewish community, as Christians were prohibited from charging interest on loans due to usury laws.

Operation[edit | edit source]

The process begins when a customer brings an item into a pawnshop. The pawnbroker assesses the item's value and offers a loan based on a percentage of the item's estimated resale value. The pawnbroker then keeps the item until the loan, plus interest and any additional fees, is repaid by the customer. If the customer cannot repay the loan by the end of the contract period, the pawnbroker has the right to sell the item to recover the loan amount.

Regulation[edit | edit source]

Pawnbroking is regulated in many jurisdictions to protect both the pawnbroker and the customer. Regulations may include caps on interest rates, clear definitions of terms and conditions of loans, and requirements for the pawnbroker to return the item in its original condition if the loan is repaid.

Benefits and Criticisms[edit | edit source]

Pawnbroking provides a vital financial service for individuals who need quick access to cash and do not have access to traditional banking services. However, it has faced criticism for high interest rates and for potentially exploiting financially vulnerable individuals.

Modern Pawnbroking[edit | edit source]

In recent years, pawnbroking has adapted to the digital age, with some pawnshops offering online services. This has expanded the reach of pawnbroking services and provided customers with more convenience.

WikiMD
Navigation: Wellness - Encyclopedia - Health topics - Disease Index‏‎ - Drugs - World Directory - Gray's Anatomy - Keto diet - Recipes

Search WikiMD

Ad.Tired of being Overweight? Try W8MD's physician weight loss program.
Semaglutide (Ozempic / Wegovy and Tirzepatide (Mounjaro / Zepbound) available.
Advertise on WikiMD

WikiMD's Wellness Encyclopedia

Let Food Be Thy Medicine
Medicine Thy Food - Hippocrates

Medical Disclaimer: WikiMD is not a substitute for professional medical advice. The information on WikiMD is provided as an information resource only, may be incorrect, outdated or misleading, and is not to be used or relied on for any diagnostic or treatment purposes. Please consult your health care provider before making any healthcare decisions or for guidance about a specific medical condition. WikiMD expressly disclaims responsibility, and shall have no liability, for any damages, loss, injury, or liability whatsoever suffered as a result of your reliance on the information contained in this site. By visiting this site you agree to the foregoing terms and conditions, which may from time to time be changed or supplemented by WikiMD. If you do not agree to the foregoing terms and conditions, you should not enter or use this site. See full disclaimer.
Credits:Most images are courtesy of Wikimedia commons, and templates Wikipedia, licensed under CC BY SA or similar.

Contributors: Prab R. Tumpati, MD