Quote:
Originally Posted by bnorth
Unless they want to go out of business very quickly it will be less than half your guess.
I know nothing about the new advertisers. I do have 3 friends that each own(ed) a pawn shop with close to 50 yrs combined experience. They loan about 20-30% value and charge 1% interest per day. I am told if they loan a higher % of value the payments aren't made and they just bought store inventory. They say they want some stuff to sell but make most of their $ from interest. If they get stuck with something they can only sell it once but if they keep the pawn value % low enough they can resell(loan interest) it to the original owner many times. The 1% per day interest is pretty standard now days, it is what the large chain store pawn shops are offering on tv commercials.
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At least according to this source, there are usury statues in many states that restrict the rates pawnshops may charge. They are still ridiculously high, but in many states much less than 1 percent a day.
http://www.pawnshopsonline.info/stat...s-comparisons/
For example, New York is 4 percent per month.
New York
SECTION § 46. Rate of interest. Notwithstanding any general or special statutes, local laws and ordinances to the contrary, no collateral loan broker shall ask, demand or receive any greater rate of interest than four per centum per month, or any fraction of a month. Statute Reference