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gold/silver & pawnbroking


Paul

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i notice this has not been discussed in any real depth here on the forum.

 

Has anyone used their stack with pawnbrokers to raise cash for life emergencies?

 

Although i have not done so personally, I did research into what typical APRs would be if it ever came up i needed cash quick from my stack

 

Although it is not wonga like payday loans shocking rates, it is still high relative to credit cards/overdraft

 

I found the big boys on the high street like TheMoneyShop, H&T, Ramsdens, Albermarle & Bond etc all well over 100%+ apr

 

I found my local largest jewellers/cash for gold (98% of spot) shop did pawnbroking rates of just 67% APR which is reasonable even if it was for just a week or two.

 

I find it very reassuring when you hold some of your cash in gold it is like an emergancy credit card you will always be accepted for. Without the credit checks and marks of searches on your credit file.  

 

Pop in with your 1oz krugerrand & ID/proofs, fill in forms. Get your few hundred quid you need for the boiler repair that week before pay day,  Leave with cash in your hand 10 mins later.  

No phone calls, no 20 questions, no meeting a bank bean counter grovelling for small loan etc. no pay day loan legal loan sharking 1000+% APR rates

 

In my opinion always best to hold a few good quid spare to one side for life emergencies, as why you should ever pay usury interest rates.

 

Any one else got opinions on the worlds 2nd oldest profession ;)

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I have used them yes, I saw something I wanted to invest in but didn't have the spare cash I decided the interest was worth it for the profit I could make from the deal. 

 

So I took in 1 and a half sovereigns and borrowed £160.

 

Much lower than the "buy price" because if you don't redeem by law they have to be seen to be trying to get the best from your items and returning anything else to you. So they could have a whole lot of extra work, auction fees ect. I said Cant you just sell it direct to any refinery and apparently not these days you cant. 

 

£160 borrowed for a month and i paid back £172, could have paid back in six months time but i wanted out early to save more interest.

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It is my understanding they will usually lend up to two thirds the spot value value of gold bullion

 

Loans are initially set at 7 month period, at the end of term if you have repaid principle + interest and picked up your item(s) they will try to contact you, provided you pay the interest only for the x7 month term, you can then extend the loan for another 7 months period.

 

if ultimately you are unable to repay or renew your contract after this time your goods are sold.  

If sold at a profit after costs paid (principle + interest) they have to pay you any profits 

 

If there is a shortfall when sold, and everything is not covered (principle + interest) i dont know if you the customer are still liable for the shortfall or the pawnbroker eats this shortfall as the price/risk of doing business?

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Hmmmm ???

How come folks with gold Krugers etc are having to pawn their dubloons to pay for emergencies ?

Anyone living day to day and maybe without a decent credit card facility should not be holding gold coins as this is in financial circles for investors who have other investments and should represent no more than 15% of wealth.

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If there is a shortfall when sold, and everything is not covered (principle + interest) i dont know if you the customer are still liable for the shortfall or the pawnbroker eats this shortfall as the price/risk of doing business?

 

The pawnbroker takes the hit on that one. Customer is not liable once the item has been sold

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Instead of going to a pawn broker would it not just be easier to just sell it?

 

Then you are under no pressure, you have the money to use for whatever, then when you save up again you can buy the PM's back. 

 

& I agree with Paul, I only put money into PM's I should never have to touch again.

Help thread for members new to silver/gold stacking/collecting

The Money Printing Myth the Fed can't and don't money print - Deflation ahead, not inflation 

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Yes that would be a bummer you keep your coins pristine for eons then some dopey git in a pawn broker starts pawing them instantly.

 

Oi you were are your gloves.

 

Just as well there is glass separating us from one another. :angry:

 

No I never have pawned any and hope never have too.

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Hmmmm ???

How come folks with gold Krugers etc are having to pawn their dubloons to pay for emergencies ?

Anyone living day to day and maybe without a decent credit card facility should not be holding gold coins as this is in financial circles for investors who have other investments and should represent no more than 15% of wealth.

 

i don't personally see i would ever need to use a pawnbroking facility to release some cash in emergency and hope i never have to but to have that reassurance in the back of your mind it is there and available is very good, you couldn't do the same with a £100 pair of nike trainers and a Paul Smith shirt

 

it would only be for mega major emergency or cracking deal came my way i could ever see me needing to use pawnbroking for cash

 

  • Bad us of pawnbroking:

Pawning your 1oz coin for a weekend Friday & Saturday night bender on drink, loose women and clubs 

 

  • Good use of pawnbroking:

Someone who isnt me, going to the canary islands for a fortnight, and you use your 1oz gold coin to get some immediate liquid cash to get a few hundred euros short term to bring back some £4.40 pouches of 50g rolling tobacco.  In a fit of betterment, you decide on the flight back you are suddenly going to give up smoking. 

 

You then give these pouches away for FREE to people in the UK who are crippled and pee'ed off at having to pay £17.75 in Tesco for the same identical product.  A bit of freelance philanthropy, you do this as you are a kind hearted person.  You give them away on the condition you are happy to take a gratuity or finders fee for passing on such a saving to them.  

 

You use these donations to pay off your loan + 2 weeks interest and redeem your 1oz krugerrand from Fagan, the graspy money changing shylock pawnbroker.  

 

Should there be any surplus cash left over you can donate it to a political party of your choice or add it to your capital gains section for hmrc

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i you couldn't do the same with a £100 pair of nike trainers

 

You would be very suprised at the money to be made in vintage and limited edition trainers . Its a very big business these days

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absolutely, but I doubt many pawn shops would touch them or if they did you might get 20% of value tops. 

 

Gold is perfect to pawn if you really need to. and its about the only item pawn brokers will take on a six month loan. Anything else (ipads,hifi stuff,computer games,phones ect) they will take, but only on a 28 day "buy back" at a vastly higher interest rate or roughly 360%

 

I was trapped in the circle of using cash converters to fund bad habbits during my youth, glad to get out of that one.

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  • 3 weeks later...

I was thinking the other day that it might be cheaper to sell your gold at spot rather than pawn it. Because you may be able to replace it at a later date for less money than you would have paid back to the pawnbroker's to redeem your item back. OK its not the same with sentimental items but for bog standard bullion its an idea

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........hhhmmmmmmmmmmm it seems a little spammy to me, Danny.  No reason to favour one pawn broker over another other than APR % charged

 

This is from the National Pawn Broker Association site

 

NPA Key Facts
Pawnbroking industry facts:
 
Please cite the NPA if you use the following data
 
- The UK pawnbroking industry has grown by 8% over the past 12 months (June 2012 - June 2013).
 
- There are now 2,144 pawnbrokers in the UK operating in a market valued at £865m.
 
- Pawnbrokers typically charge an annualised interest rate of 80 to 130 per cent, which equates to 6 to 9 per cent a month.  
 
- The average loan to businesses is £2,000 to £3,000 and is now typically used to make short term payment to creditors or staff rather than for business development.
 
- Customers are being more careful in balancing their household expenditure and managing money well with part payments on the increase.
 
 
 
Bristol University Personal Finance Research Centre report - Pawnbroking Customers in 2010
 
- The average loan from a pawnbroker is under £100.
 
- 95% of pawnbroking customers say they were satisfied or very satisfied with the service they received.
 
- 85% of loans from pawnbrokers are redeemed.
 
- 90% of people have heard of Pawnbroking but few understand it. Only a few per cent have ever visited one. However, nearly 8 million people in the UK do not have a bank account.
 
- 71% of customers are loyal to one pawnbroker. This is often within short proximity to home.
 
- The majority of customers consider themselves good money managers.
 
- The most popular pawn item is gold rings.
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