Christmas – Pawnbroker: If you don’t have money for the holiday

Loved ones want to receive presents, there should be a festive meal on the table – Christmas is not only a festival of joy, but also of consumption. If you overdo it or really want to spend more than you have, you can quickly run out of money. That’s why installment payments and credit card payments are extremely popular, especially at Christmas.

More and more Vorarlbergers are also taking advantage of the opportunity to get money from pawn shops. Jewelry, watches, gold coins, a smartphone or other tech devices can temporarily fill the empty space in your wallet with cash. “In general, there is an increase around Christmas, because many of our customers use a pawn loan for a short bridging period,” reports Michael Holubowsky from pawn shop Dorotheum, which also operates a branch in the Messepark in Dornbirn.

Cash at hand in minutes
Accordingly, the pawn shop in Vorarlberg recorded a customer growth of around ten percent at Christmas. There are several reasons why Dorotheum customers choose a pawn loan over a bank loan or other financing options, says Holubowsky: “The account may have already been charged off.

A pawn loan is also unbureaucratic: all that is required is proof of identity and an age of 18 years. In addition, an insolvency investigation must be initiated and it must be proven that the given object is the property of the pledgor. Five minutes later you have the money in your hands or in your account.” According to Holubowsky, on average about 800 euros in jewelry loans are provided.

What you get and for how much money varies per pawnbroker. In the Dorotheum in Dornbirn, a loan of between 40 and 60 percent of the current value is provided for technical equipment – depending on the model and brand.

When determining a jewelry deposit, several factors are crucial: purity, condition, material value, weight, and so on. The loan amounts to between 60 and 80 percent of the realizable value. The term depends on the type of loan. However, there is usually up to five months to return the deposit – or, if necessary, extend the deadline again.

According to Holubowsky, the reimbursement rate is high. About 90 percent of customers would pick up the pawned items again. “Because our financial service represents a complementary product in the financial market and is used to bridge financial bottlenecks for a short period of time, the collateral loans are often repaid with upcoming payments such as Christmas and holiday bonuses.”

Most people exchange their valuables
Grab the money and leave, but it’s not that simple. There are certain terms and conditions that must be taken into account. “Of course our interest and fees are stated.” Every half month, 0.5 percent loan interest and a 1.25 percent fee for the appraisal, custody and safe storage of valuables are charged. There are also costs associated with providing the pawn slip.

Customers have five months to redeem their items. However, the deadline may be extended again. “All you have to do is pay the previously accrued interest and costs and then you have five months to pay off the loan.”

If someone is unable or unwilling to return the deposit, the item will be auctioned or sold through a jeweler. Debt advisors are generally critical of mortgage loans. Because the loan, unlike installment loans or credit cards, is secured by the pledged property, there is in any case no immediate risk of further debt burden.

However, the interest and costs for pawn loans can be very high compared to other forms of credit and can further increase the financial burden. The biggest problem: a pawn loan only solves short-term financial bottlenecks and does not solve fundamental problems such as income differences or excessive debt burden. You must be aware of these risks!