This is how the E and B Pawnbroker process works… Traditionally, a pawnbroker provides small cash loans to customers using personal items as collateral. Many brokers secure jewelry such as diamonds, watches, gold, and precious stones as collateral, and usually for cash loans of $200 or more. Pawnbrokers may also give you a loan against items such as televisions, cameras, and electronics as collateral. And, because the items are used as collateral, there are no difficulties when collecting the loan. Pawnbrokers physically secure the collateral items to be resold if there is a default on the loan.
All pawnbrokers are licensed in the state of New Jersey through the Department of Banking and Insurance. The State Department of Banking view NJ pawnbrokers as a financial institution. The pawn broking statutes currently allow for an interest rate of 3.75% per month. E and B terms are set to 3.5 % a month. E and B loans are usually held for a 30-60 day period after maturity before sale.
Prior to the sale, E and B Pawnbroker provides its customers with two options
- Option 1: Payment of interest only – customer pays the amount of interest accrued on the loan and can then extend the term another 90 days.
- Option 2: Payment of accrued interest and loan principal – merchandise is returned to the customer and pay interest on their loan for as long as they wish, with no final term.
After the required notice has been made and the sale date has passed without payment, the broker can begin sale of the item. If all conditions are satisfied, the item can then be sold on a retail or wholesale basis. The redemption rate for loans made at E and B run at about 42.58% APR, meaning interest is paid on that percentage of items pledged.