Just like a bank, a pawnbroker earns money by the interest charged on a loan secured by a mortgage good. In
order to accept goods into mortgage a pawnbroker evaluates the item on the spot. The client and the
pawnbroker will agree upon an advance amount and then the pawnbroker will present the good to a new or
existing client the document completed is known as pre contract information. ​If the client wants go ahead with
the transaction they sign the original agreement which is a document with details of their rights and protection
under the Consumer Credit Act 1974 and the terms and conditions of the loan. The client has full authority to
give notice to withdraw from the signed agreement before 14 days and also bound to make partial or full early
repayments in cash. They are also privileged to get their property by paying the original amount and the
amount due at any time during the contract period. Not like the other kinds of credit, pawnbrokers can evaluate
the worth of credit depending upon the value of the item if sold. Hence customers are not credit checked.

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After the payment of loan and interest are paid the item is returned to the client. If the customer didn’t
managed to repay the loan during this time and the loan was over £100 he will get a notice that the property is
due to be sold giving him a further statutory period of 14 days in which he can get his property by paying the
loan. If the client did not respond the notice, the pawnbroker is allowed to sell the items. To sell the goods the
pawnbroker must obtain the true market value on the date of sale which secures that a good price is obtained
for the customer. When the amount of sale is bigger than the amount due to the pawnbroker, the money is
returned back to the client. The customer is not accused for any debt and will not pay more than the value
obtained from selling the item. Pawnbroking in London is on the High Street and commonly jewellery retailers
provide them a setup for lending and for storing items safely in storage. The property that the great majority of
pawnbrokers give loans against is gold, jewellery and watches. This is because they are:

● easy to value
● easy to store
● are a luxury ‘can do without’ item
● do not perish
● do not generally depreciate
● have an established second-hand market

The future of pawnbroking industry is very bright because:
A pawn broker can lend from £5 to many thousands of pounds in one simple, quick transaction that does not
require credit checks or long discussions or form filling. The main reason that the future of pawnbroking is
bright because of Short Term Cash flows. Pawnbroking is flexible, transparent, competitively priced and quick
and these are the factors that clients prefer are satisfied with the service they receive. The result of
Pawnbroking is huge amount of potential customers.

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