Pawnbroker

The job of a pawnbroker is based on the granting of money loans against a lien on movable property ( § 1204 BGB). This lien, which is established by agreement and transfer of the pledged property to the pledgee, is also known as a bargaining chip. The conditions under which the commercial operation is a pawnshop allowed to be governed by different states differently by law. Working as a pawnbroker usually requires an administrative license. His place of business is also called the pawnshop, pawn shop or pawn shop.

The job of a pawnbroker

Prerequisites for operating a pawnshop

In order to open a pawnshop, the applicant must 'overall financial situation as well as a trade legal authorization according to § 34 can show trade regulations. The legal basis for the operation of a pawn shop are regulated in the Pfandleiherverordnung. The Commercial, the applicant must apply to the competent regulatory agency and provide the documentation required. In addition to an official certificate, a proof of the necessary resources and the excerpt from the Central Trade Register, the applicant needs an insurance according to § 8 Pfandleiherverordnung " has the pawnbroker the pledge at least to twice the amount of the loan against fire damage, water damage, burglary and against robbery to insure. "

In addition, the pawnbroker in many municipalities must demonstrate high standards of reliability, in the city of Cologne, for example, in the amount of 100,000 euros. The issue of Pfandleiherlaubnis a fee is levied, the amount differs from municipality to municipality.

Requirements for mortgage lending

The pledgor should appear in the pawn shop personally. An authorized representative requires a written power of attorney. According to § 6 Pfandleiherverordnung the pawnbroker shall issue a pawn ticket after receipt of deposit. This includes information on storage and recovery of the deposit, on interest rates and cost of the mortgage loan and the terms and conditions of the pawnshop. Each token is provided with the number on the deposit slip. The pawnbroker must be at least one month after the expiry of the loan due to expire before realization of the pledge not triggered otherwise. Surpluses from the exploitation that are not picked up within two years from the pledgor are remitted to the competent authority.

Services of a pawnbroker

The authorization by the pawnbroker include the grant of a loan against the surrender of movable valuables. Also, certain securities ( bearer bonds) may be accepted as a deposit. The borrower must present no further collateral still submit a credit check. To determine the necessary data of the pledger proof of identity with an official ID document. The mortgage loan is so much red tape available than a traditional installment loan. The pawnbroker then pays a portion of the value in cash to the borrower. The lending rate is highest for vehicles with around 80 % of the value, common for other items are 25 to 50 percent of the value.

Can be triggered deposit against payment of the borrowed amount plus accrued interest and fees. For motorized vehicles Pfandleiherverordnung provides, moreover, that for storage, maintenance and insurance of the vehicles a daily fee ( so-called state fees) can be agreed. If the pawns did not fire, the pawnbroker is entitled to one month after the due date of the credit for the sale of movable property and committed six months after the due date. Usually this takes the form of an auction. It may be agreed with maturities less than three months.

In the mortgage loan has an interest rate not exceeding one per cent per month or part thereof, § 10 Pfandleiherverordnung omitted. In addition to the interest accrues monthly mortgage fees, for which there are also maximum limits: For loan amounts to 100 € are the upper limits of between 1 € and 2.50 € per month, each additional € 50 loan amount further € 1 per month. For a 10 - € loans up to 1 € and 0.10 € fee interest shall be payable per month, which is an annual percentage rate of 132 %. For a 100 - € loan up to 2.50 € and 1 € fees interest rates are so per month overdue, which is an annual percentage rate of 42 %, for a 300 - € loan 38%. For a loan amount of more than € 300 are subject to the fees of the free agreement between the parties.