The Rise and Of Pawnbroking
Looking to loan against gold in Australia? Pawnbroking in Australia is emerging as the preferred method for obtaining short-term loans without resorting to exorbitant interest rates or unlicensed lenders. Pawnbroking is a simple concept that has served borrowers for hundreds, if not thousands, of years.
A History of Service
Pawnshops are the oldest financial association in the world, dating back at least three-thousand years to ancient China and appearing in ancient Roman and Greek civilizations. They are not attempting to invent a new method of assisting people in obtaining credit; rather, they have been improving on what already exists. You’ve probably heard pawnbroker stories before, but you didn’t recognize them. Throughout history, pawn shops have always helped people — all people.
Pawnbroking is not a new practice, nor does it cater to a single social class. King Edward III of England is said to have visited pawn shops throughout Europe back in the 14th century. Queen Isabella pawned the crown jewels to fund Christopher Columbus’ voyage to the Americas. The wealthy Bishop of Myra came to the aid of a poverty stricken father of three daughters. According to the customs of the time, the sisters could not marry unless a dowry was presented; if no dowry was presented, they would be forced into slavery or prostitution. At midnight, the Bishop paid a secret visit to the man and his daughters’ home, leaving three bags of gold for the eldest daughter’s dowry.
This would be the case until all three girls were married. The Bishop became known as the Patron Saint of Children, and every year at the stroke of midnight, children awaited his arrival with gold gifts. Does this sound familiar? He is now referred to as Saint Nicholas. Saint Nicholas, the patron saint of pawnbrokers, is known for spreading generosity and goodwill. Some pawnbrokers in Melbourne hang three gold balls above their doors to greet the spirit of Saint Nicholas and wish their customers good luck.
How do pawnshops operate?
A borrower ‘pledges’ a valuable item for a specified period of time. The borrower has no restrictions on what they can pledge, and the pawnbroker will cooperate with them to get the most out of their item.
The pawnbroker makes a loan for a large portion of the item’s value, and the customer must pay interest when the loan is repaid.
The loan can be repaid at any time during the loan period, along with any interest owed, and the item will be returned. If the loan is not paid off by the end of the loan period, the pawnbroker sells the item on the customer’s behalf. Pawnbroking is an option open to everyone regardless of their credit rating.
Pawnbrokers are not immune to business pressures, and as regulations become more stringent, some businesses are leaving the pawnbroking industry. Businesses with a licence to offer credit to customers needed to be reauthorized by the Financial Conduct Authority, which was a lengthy and difficult process.
When you loan against gold in Australia you can rest assured that pawnbrokers are scrutinized by the Financial Ombudsman Service, which received only a few complaints last year, with only a small percentage of them upheld, indicating a high level of satisfaction among pawnbroking borrowers.
