PAWNBROKING Meaning and
Definition
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Pawnbroking is a financial service where a person, known as a pawnbroker, offers loans or credit in exchange for personal property items that are used as collateral. The act of pawnbroking involves a legal agreement between the pawnbroker and the borrower, commonly referred to as the pawner or customer. This industry has a long history and can be found in various cultures across the globe.
In this process, the customer pledges an item of value to the pawnbroker, usually a piece of jewelry, electronic device, or other valuable possession, which serves as security for the loan. The pawnbroker assesses the item's worth and offers an amount of money based on that evaluation. The borrower receives the loan amount and a pawn ticket, which outlines the terms and repayment details.
The pawnbroker keeps the pledged item in their possession until the customer repays the loan, along with any interest or fees agreed upon. Once the debt is satisfied, the item is returned to the borrower. If the customer fails to repay the loan within the specified timeframe, the pawnbroker can sell the item to recover the outstanding debt. This process allows the pawnbroker to mitigate the risk involved in providing loans without traditional credit checks and requirements.
Pawnbroking provides immediate access to cash for individuals who may not have access to other means of credit or loans. It serves as an alternative method for obtaining short-term financing, particularly for those with poor credit ratings or limited financial resources. Pawnbroking is regulated by specific laws in many jurisdictions to protect both the pawnbroker and the customer, ensuring fair practices and transparency in the loan process.
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The trade or business of a pawnbroker.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
Common Misspellings for PAWNBROKING
Etymology of PAWNBROKING
The word "pawnbroking" is derived from the term "pawn" and the Old English word "brog", which means pledge or security. The term "pawn" originated from the Old French word "pan", which referred to a piece of clothing used as security for a loan. The word "broking" comes from the Middle English word "broke" meaning to deal or trade, suggesting the act of exchanging a pawn for a loan. Therefore, "pawnbroking" essentially means the trade or business of lending money on the security of pledged items.
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