How is a loan obtained through a pawnshop typically paid off?

B. In a single payment, and the collateral is returned

Multiple-choices

A. In multiple payments, and collateral is retuned

B. In a single payment, and the collateral is returned.

C. The lender sells the item to pay off the interest.

D. The lender cashes a postdated check.

Explanation:

A pawn-loan is a credit facility based on collateral provided. Pawnshop issues pawn-loans without any credit history checking. The borrower presents an item of value, either jewelry, electronics, mobile gadgets, or other items resellable to other customers.

A pawnshop typically issues short term loans. The credit period is mostly 30 days. The borrower is should to repay the loan amount plus interest by end of month to redeem their collateral.  Due to the short credit period and the high risk of lending, pawnshops do not usually allow installment repayments.

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