With a mortgage loan is an easy way to bridge a short-term financial bottleneck. Pawnbrokers pay cash for valuables from antique to zirconia. The mortgage loan is better than its reputation – the middle class uses it on average most frequently. Many self-employed people who find it hard to get credit from banks see a deposit loan as a convenient way to raise funds for an investment at short notice. But how does a mortgage loan work and what has to be considered in the pawnshop?

Significance of the mortgage loan

What distinguishes a mortgage loan?

A mortgage loan is one of the oldest forms of loan in the world . The borrower named in this loan pledge deposits a movable object of value in a pawn shop and receives a certain amount of money as loan. The bureaucratic effort is negligible. For a mortgage, neither proof of credit in the form of salary certificates or property ownership nor a Bank information is necessary . The pledger receives from the value of goods between 25 and 70 percent paid in cash, which is about the price that would be achieved in a sale. Within a period of three months , the pledger can re-trigger the loan. The pawnshop does not acquire any property rights by paying out the money. As with a traditional loan, interest is charged on a mortgage loan. Up to a total of 300 euros it is one percent, about two percent. The legislature has set as well as the fees of 2.50 euros per month for sums over 100 euros and 6.50 for a mortgage over 300 euros .

Forms of mortgage credit

The mortgage loan in the pawnshop

Most pawn shops are reputable, modern companies that offer a pawn loan instead of goods . The customer estimates an item of lasting value, receives a pawn certificate and immediately pays the pledge loan. Its profits make the pawnshop from interest and fees, which are specified by the legislator in the Pfandleiherverordnung .

The pawn loan has an old tradition in Germany. As early as 1650, a pawnshop was opened in Regensburg. The pawnshop always has its own workshop, in which the valuables of the customers can be estimated the same. If one agrees, the payment of the sum takes place immediately in cash. The mortgage loan is often called the “credit of the little man” . In contrast to normal bank loans, it is sufficient to be in possession of a valuable asset in order to receive immediate cash. The identification card is sufficient, no further documents are required. Anyone claiming a mortgage loan does not owe any debts. If the customer does not cancel the pledged property after the agreed deadline, it goes into the auction . This result is not convenient to the donors of a mortgage credit. Not only the pawnshop loses money, the customer has lost his property. When triggering their mortgage lending, the Germans are exemplary: 93 percent of the pawns trigger their valuable object again.

The online mortgage loan

The online mortgage loan works like a classic pawn shop. The difference is that everything is digital. As a rule, luxury watches, jewelery, precious stones, precious metals such as gold bars and gold or silver coins are accepted . Also other valuables such as high-quality smartphones and other consumer electronics can be submitted for a mortgage loan . The customer uploads one or more photos of the item for his loan request. By means of an analysis, appraisers value and the customer then receives an offer for a mortgage loan. If it agrees, the online pawnshop arranges the collection of the item by express service or Werttransporter. The online pawn shops take over once again a final check and then make the transfer of the sum to the account of the pledger. Most transactions are completed within 24 hours. For exceptional valuables, the processing may take a little more time.

Until the pledger triggers his valuable item, it is stored in a vault. Also in the online pawn shop there is a pawn ticket, which is considered the official contractual document. If the customer has repaid the sum, the item will be returned. For such fees, the deadlines may be extended beyond the usual three months.

There are now online pawn shops specializing exclusively in cars . The loan is paid in full, or on a pro rata basis, based on the current value of the vehicle. The owner can continue the car during this time. As with all business transactions on the Internet, caution should be exercised with a mortgage loan, as there are also black sheep among the providers. It is also advisable to compare the offers of various online pawn shops , which is more time-consuming than the walk to the nearest pawnshop .

Advantages and disadvantages of a mortgage loan

What opportunities and advantages does a mortgage loan offer?

A pawn loan benefits everyone who needs money quickly but does not want to take out a regular loan or can not do so due to a lack of creditworthiness. In addition to the pawnshops to be found in every major city, loan seekers can also try their luck with online pawnshops.

These are the advantages:

• No credit check: Money versus commodity offers some advantages over the conventional bank loan. This mainly affects credit seekers who have an entry in the Bank or several loans run, so that the banks see a lack of creditworthiness. For a mortgage loan, there is no evidence of specific cash receipts or other assets . Consumers with a bad score need not be concerned when they ask for a mortgage. There is no report on the pledge credit to the Bank, as it is a Bank-free loan. Also guarantors are not necessary. As security the deposited value suffices.
• No bureaucracy: filling in forms is not necessary with this type of loan. The pledger receives a loan certificate and proves his identity by means of an identity card. Further documents are not needed.
• Security: Valuables are in good hands in the pawn shop, because they are stored in vaults. The loan note issued to the pledgor is considered an official document. The procedures and fees in a pawn shop are regulated by the Pfandleiherverordnung.
• Fast transfer: Anyone who decides on a mortgage loan from an online pawnshop may expect a very short transfer time. As soon as the pledger has accepted the sum, it is instructed – usually the same day.
• Quick estimate: Valuables such as jewelry, coins and precious metals are assessed quickly and reliably by the experts in the pawnshop. Only with failed items, it can lead to a greater time stress.
• Fast payout: If the customer and the pawn shop agree, the pawn loan is often paid in cash within minutes.
• Short maturities: For those who need cash quickly, but do not want to commit to long repayment periods, a mortgage loan is ideal. The loan usually runs for three months. However, the pledger is free to trigger his object of value within this time period on any given day. Nobody has to wait until the end of the maximum runtime.
• Uncomplicated extension: If it does not work as planned with the repayment, the term can be extended. For this, a renewed access to the pawnshop is required, since only the previously accrued fees and interest must be paid.
• Calculable Risk: If a loan can not be paid, it can be uncomfortable for a borrower. If the pledge loan is not replaced, the valuable asset goes to the auction. The risk of non-payment is exactly calculable for the pledgor. If the value at auction exceeds the amount of the loan, the customer is entitled to withdraw the difference after the loan has been paid by the proceeds.

What risks and disadvantages does a mortgage loan offer?

A mortgage loan is flexible and unbureaucratic.

But the system also has some disadvantages:

• High interest rates and fees: A mortgage loan is comparatively expensive. For a sum of 500 euros, five euros interest and 15 euros other fees are due after one month . If the term is extended because the value can not be raised, the interest rate for one year is at least 48 percent. Even the regular credit line at the bank is much cheaper.
• Refusal: A pawnshop can refuse the mortgage loan because the valuables are not valuable enough.
• Loss: If the money does not come together to pay off the mortgage, the thing goes into auction and is lost.
• Short term: A mortgage loan is only for people who can repay a borrowed amount quickly, otherwise it will be expensive with interest and fees.
• Too little money: Sometimes the jewelry or the painting is not worth as much as it is supposed to, and a significantly lower amount than expected for the mortgage loan is offered.
• For the patient: Anyone who chooses an online pawnshop needs patience. Because checking, shipping and receiving payment on the account take time.
• Small sums: A mortgage loan is usually not paid in the four-digit range or above. Typical are small sums up to 500 euros, in exceptional cases, more.
• Misjudgments: Even the best reviewer may be wrong. Therefore, it is advantageous to obtain offers for a pawn loan from various pawnshops.

Alternatives to the mortgage loan

guarantee

Anyone who has already taken out many loans may not get a loan from the house bank or other providers due to a lack of creditworthiness. In this case it is possible to take out a loan with the help of a guarantee . Mostly take over the family members or close friends. If the loan installments can not be paid, the guarantor will be liable. Many have fallen into debt because of their helpfulness. In the event of a dispute, the guarantee continues to run, which can become a risk if, due to unwillingness, no more credit installments are paid. Frequently, cash is needed quickly to finance a rental deposit. In such cases, a rental guarantee offers. The landlord receives instead of the amount of money a guarantee certificate. This service costs the renter a specific fee per year.

small loan

Small loans are an optimal way to get money fast. For a mini loan, a fixed income of 500 euros per month is required. Thus, a small loan is also possible for pensioners, subscribers of ALG I, students with a fixed part-time job and freelancers. Similar to the mortgage loan, such micro -credits are granted by specialized companies on an online application as fast as lightning . Characteristic of small loans is a short term. This is between 30 days and six months. Due to the short maturities, the annual percentage rate of interest falls only proportionately, which makes small loans particularly attractive. Possible totals between 100 and 3000 euros.

Deposit a loan: Requirements and procedure

Regulations and legal framework

The Pfandleihverordnung regulates the commercial mortgage lending business in the German legal area . Specifically, the regulations on the display of the trade, the obligation to keep records, the form and content of the pledge, the method of storage and the insurance and recovery of the pledged pledges are determined. Also, the interest and fees are required by law.

Pawnbrokers are bound by this ordinance, otherwise they face penalties. A pawnshop requires a permit from the authorities and is subject to their supervision . In the pawnshop, only the rightful owner of a valuable item may take out a mortgage. Forbidden to pledge the property of third parties is a criminal offense. Who wants to pledge foreign property, for example because the grandmother has provided jewelry, requires a power of attorney from the owner.

Under what condition can mortgage loans be taken up?

Getting a mortgage loan is very easy. Customers need to think ahead to see if they can go to the house or use the service of an online pawnshop. It is worth comparing offers. If you have multiple valuables to choose from , everyone should be appreciated to make the best selection. Valid identification documents are sufficient. For an online mortgage, the procedure works similarly. The only difference is that photos of the valuables are sent to the pawnshop for review.

How to complete a loan:

• Get quotes from various pawn shops : either by a personal visit or by submitting photos
• Presentation of identity card and valuables in the deposit office
• Examination by the appraiser and offer : on average 50% of the resale value
• Signing the pledge agreement and handing over the deposit slip to the customer :
• Payment of interest and fees
• Within three months triggering of pledged valuables possible . If not: extension of the deadline. This will incur new charges. If the mortgage credit is not triggered, the valuable item goes into auction.

Customers who lose their pledge must report this to the pawnshop. Otherwise, the finder could redeem the item. After agreement with the pawnshop, the release is then possible by means of an identity card.

Tips for dealing with the pawnshop

Proper handling of the pawnshop

Whether antiques or gold jewelry – the range of what pawn shops assume is large. More and more people are bringing their smartphones to the pawnshop. In addition, weapons, cars and musical instruments are also accepted. However, technical devices are only accepted if they are in perfect condition. It often happens that objects are rejected, for example, because they are kitsch instead of art. In addition, it should be thoroughly examined before going to the pawn shop, whether a mini loan is the better option .

The pawn note should be well kept because it is considered the proof of ownership . If, after the deadline, there is no possibility to repay the pledge loan, customers should be aware of the auction date and, if necessary, have a higher differential amount paid out directly.