Pawnshops

• Pawnshops are one of the easiest and most convenient sources of credit. They provide an additional source of credit, especially to small borrowers who are not qualified to obtain small loans from other financial institutions.
• Pawnshops is agencia de empenos, in Spanish, or bahay sanglaan in Pilipino
• Presidential Decree No. 114 is the Pawnshop Regulation Act was issued to take effect immediately on January 29, 1973. However, it was only on July 13, 1973 when Central bank Circular No. 374 (Rules and Regulations for pawnshops) was issued by the Monetary Board to implement the mandates of PD No. 114.
• The purposes of Presidential Decree No. 114, is to regulate the establishment of pawnshops and to place their operation on a sound and stable basis to derive the optimum advantages from them as an additional source of credit. To prevent or mitigate, as far as practicable, practices prejudicial to public interest. To lay down the minimum requirements and standards under which they may be established and do business.
• Pawnshop shall refer to a person or entity engaged in the business of lending money on personal property delivered as security for loans. The term shall be synonymous, and may be used interchangeably, with pawnbroker or pawnbrokerage.
• Pawner  shall refer to the borrower from a pawnshop.
• Pawnee shall refer to the pawnshop or pawnbroker.
• Pawn is the personal property delivered by the pawner to the pawnee as security for a loan.
• Pawn ticket is the pawnbroker`s receipt for a pawn.
• Property shall include only such personal property as may actually be delivered to the control and possession of the pawnee.
• Voting Stock is that portion of the authorized capital which is subscribed and entitled to vote.
• The Manual of Regulations for Banks and Other Financial Intermediaries, Book IV, pertaining to pawnshops clarifies that the Vital records shall consist of the loans extended/paid, registers, general ledgers/journal covering the current and at least the proceeding two years of operations, unused accountable forms and partnership, stock certificates, etc.
• Bulky pawns refer to household appliances, office machine and the like, which occupy considerable amount of space, that is measuring at least 1.5 x 1.5 x0.5 feet.
• Premises shall refer to the area where the pawnshop conducts its business and maintains office.
• The premises of a pawnshop include office or storage spaces maintained and/or used by the pawnshop which are adjacent to the pawnshop's location.
• Pawnshops make money by providing personal loans, reselling retail items, and offering auxiliary services, such as money transfers or cellphone activation. Earning interest on loans and profits on retail sales are the principal income sources for the standard business model for a pawnshop. Pawnshops typically aim to generate overall net profit margins of at least 15% to 25%.
• The two primary ways pawnshops make money are by making personal loans and by reselling retail items.
• • A pawnshop owner makes a loan to a customer who turns over the custody of an item that acts as collateral for the loan.
• Because the risk of loan default is high, the pawnshop owner will charge the customer a higher interest rate for the loan than a traditional bank loan.
• • If the customer fails to repay the loan plus the interest (or at the very least, the interest charge), the customer forfeits the property put up as collateral to the pawnshop.
• • Pawnshops can also make money from retail sales, either selling merchandise purchased directly from customers or items pledged as loan collateral from customers who subsequently defaulted on their loans.
• The amount a pawn shop is willing to lend is based primarily on the value of the item, but it can also be substantially affected by the pawnshop's current inventory at the time of the loan.
• If a person is looking to borrow money using a television as collateral and the pawnshop's inventory is already overflowing with similar televisions, it will generally offer to lend considerably less money than if it were low on inventory for televisions.
• The five things to consider before you pawn your time in a pawnshop are LSIQGR: License to Operate, Safe Storage and Insurance Coverage, Quick and Convenient Transactions, Good Reputation, and Reasonable and Competitive Rates.
• Check for the certificates and business permits, which should be seen on the pawnshop premises. Check the list of Bangko Sentral ng Pilipinas-supervised pawnshops to ensure you’re dealing with a legitimate and reputable pawn shop.
• For peace of mind, entrust your valuables to a pawnshop that provides insurance coverage for pawned items. Furthermore, choose a pawnshop that invests in its security to keep your pawned items, the pawnshop, and customers and employees safe.
• When you need urgent cash, you shouldn’t have to travel across towns and cities just to get to a pawnshop. As much as possible, choose one that has branches everywhere or offers online services for a fast and hassle-free transaction.
• Go online and check the reviews from previous customers. Aside from honest and positive reviews, the pawnshop must have experience and expertise in the pawnshop business. It should also have loyal and satisfied customers and consumer-friendly offers and services.
• Shop around and compare rates to find the lowest interest offered by a pawnshop in the Philippines. How much interest do pawn shops charge, though? Most major pawnshops charge around a monthly 3% to 4% interest rate. Anything higher than this can be a burden to pay every month.