The Gold Standard - Loans w/cards as collateral

[bnorth]

Originally Posted by pokerplyr80

If I had to guess I would say 70-80% of VCP. Maybe less.

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.

[Peter_Spaeth]

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.

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

[T205 GB]

I think for someone that has certain cards worth money that are not replaceable this would be a good option over selling them at a reduced price and regretting it later. At least this way you can get a few $$ for what you need and can pay it back over a few months rather than a payday loan at 20%+ per $100 due in 2 weeks or less.

[pokerplyr80]

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.

That makes sense on the loan to value. I suppose someone is much less likely to let a card go when they've only received less than a third of what it's worth.

I thought pawn shop rates were typically about 10% per month.