Why it is not good to pawn your belongings for loans

We have all had economic urgencies in which on many occasions despair has caused us to resort to various financing that instead of favoring us, has further damaged our economic situation.

It may be faster to get money from a relative or an acquaintance through the famous “informal loans.” However, even if they help you out of trouble, informality can make interests vary and you won’t have any legal protection to support you from the whims of the lender.

Another almost traditional option in our country and that puts at risk not only your personal finances but also your belongings is to resort to the institutions of pledge loans, better known as Pawn Shops, where to obtain a certain amount of money you must leave Well furniture as a guarantee.

If you’ve ever considered pawning your belongings to deal with your emergencies, you need to read the following.

Risks of pawning your belongings

Risks of pawning your belongings

Finding a Pawn Shop is not difficult, there are everywhere and this popularity is because they can give you money for any purpose. No matter what you wear, they evaluate it and give you an amount in return, and although it seems a simple and advantageous option, it can actually be very risky.

You do not receive the real value of your belongings

Surely you thought that for that television they were going to give you a lot of money and it turned out that you did not receive even half of what it cost you. Although many Pawnbrokers boast of offering 70% or 80% of the commercial value of the product, these are only a maximum and vary depending on the conditions of the object (the use it has received, how modern it is, its functionality, etc. .).

Because of this, for many, it makes sense that the more valuable the garment, the more money they will receive and therefore end up pawning objects such as jewelry, cars and even property.

Interest rates are the highest. When you need the money immediately, the least important thing is knowing how much you have to pay interest. However, before you resort to a Pawn Shop, you need to know that within the Financial Institutions that offer personal loans, they have the highest interest rate compared to the liquidity of your goals. In short, you can pay much more than they will give you for your belongings.

Few recover their belongings

Few recover their belongings

Having an extremely high-interest rate, it is very difficult for people to pay the amount that lent them more interest generated.

In addition, when you do not comply in time and form as established in the contract (which we recommend you read before signing), the Pawn Shop is fully entitled to sell your belongings, and at a very different price from what they gave you.

It is easy to fall for fraud and deceit

It is easy to fall for fraud and deceit

As we mentioned at the beginning, Pawn Shops are everywhere, but very few guarantees that their procedure is legal. When your belongings are evaluated and you agree on the amount they offer you, they must provide you with a ballot or contract that stipulates the entire legal procedure of the loan (how much they offer you, under what conditions, what the payment terms are, what happens in case of not paying).

In this document, they must include the registration number that Profeco grants them if not, you can enter the Commercial Bureau section of this agency to know its status. That it does not appear means that it is not registered and that you can be a victim of a scam.

Do you need money safely? Then opt for personal loans online. In Good Finance Mexico we guarantee security and ease of processing, as well as an immediate amount that allows you to cover your emergencies, but that does not exceed your borrowing capacity. Do you want to apply for one of our secure online loans?