In times of financial bottlenecks, there is sometimes not enough money to pay pending bills or obligations. If valuable items are then available in the household, the pawnshop can be an alternative to quickly and easily obtain a pawn loan – cash in exchange for valuables.
The words pawnshop or pawnshop are often used synonymously. They are companies that grant a loan via a pledge like Van Pledge (รับจำนำรถตู้ which is the term in Thai). Pawnshops can be found in almost every major city. Many specialize in certain items – such as jewelry, antiques, or cars.
How Does A Pawnshop Work?
As a consumer, you bring your valuable items with you. The pawn loans offered are checked and professionally assessed. Then a maximum price is determined. If you agree, you agree on a pawn loan on specific terms set out in a pawnbroking contract.
Your valuables will be accepted as a deposit like example a saloon will be accepted for a saloon pledge (รับจำนำรถเก๋ง which is the term in Thai), and you will receive an agreed amount of money in return. With this pawn loan, the borrower is the pledger who receives a loan for a certain period. All this at fixed interest rates and fees. If the borrower does not raise the amount by then, he can go to the pawnshop within the deadline and ask for an extension. This is usually granted. It should be possible to pay the fees and costs incurred up to that point. If the deadline expires without the object of value being released or an appointment to extend the contract, the pawnshop can dispose of the object at its discretion.
Pawnshops are legally obliged to:
Loans on pawns can be granted for a maximum of four months.
To agree on fixed lump sums depending on the credit volume for the credit processing, e.g., the insurance and storage of the items.
While the last two points apply uniformly to all pawnshops, the term for some institutions can be less than four months. Pawnbrokers can also charge less interest and fees. A comparison of the providers can be worthwhile; this can often be done online.
If the pawnbroker does not release the loan after four months at the latest and does not extend the deadline, the pawnshops can sell the items in auctions. Sometimes the income from the auction, including interest and fees, is higher than the loan. Then the surplus is paid out to the pledger. If an auction is unsuccessful, the pledger may sell the valuables in the shop.