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Frequently asked questions.

pawn shop is conceivably one of the most misconstrued business around. At the point when individuals think about a pawn shop, one thing ordinarily rings a bell: wrongdoing! In spite of the fact that the pawn business has more than a considerable amount of rotten ones, it’s in no way, shape or form a criminal’s heaven. Actually, pawn shops have a long and legitimate history of helping individuals and organizations in with their financial needs.


What is a Pawnbroker?

A pawnbroker is an individual or an entity (known as a pawn shop) who loans money at interest on non-traditional collateral presented by a borrower.

How does pawning work?

The way toward pawning can be condensed by the accompanying advances: discover a thing of significant worth to pawn, decide the estimation of your thing, find the closest pawn shop in your general vicinity, bring any archives that may demonstrate the realness and responsibility for thing, present your thing to the pawnbroker, secure your advance, reimburse your advance with any extra intrigue and recover your thing.

What is the average interest rate on pawn loans?

Interest rates on pawn loans vary widely and are regulated by the NCR. However, it is not uncommon to find interest rates between the ranges of 20%-30%. Although it is the NCR duty to set a maximum interest rate, it is ultimately up to the pawn shop to decide their interest rate as long as it doesn’t exceed the maximum rate by law.

What is a pawn loan?

A pawn loan is a collateral loan issued by a pawnbroker. The loan amount is determined by the market value (street price) of the borrower’s collateral. Pawnbrokers usually lend out 10% to 50% of the collateral’s market price to protect themselves from heavy losses. Thus, it should be in the borrower’s best interest to negotiate a higher percentage of their collateral’s market value.

How long do you have to pay back a loan from a pawn shop?

A loan from a pawn shop is usually considered a short term loan. Most pawn shops issue loans on a 30-day basis. This means you have 30 days to pay back the loan in full or pay the interest accrued and renew the loan for another 30 days. For example, if you borrow R5,000 at 20% interest, you will have 30 days to pay back R6,000 or pay R1,000 to renew the loan for 30 more days.

What are the rules and regulations of the pawn industry?

This booklet serves as a guide to the National Credit Act 34/2005 (NCA) also referred to as ‘The Act’. It is for persons who take up credit in the form of a loan, lease, instalment sale, credit card or obtaining goods or services on credit, etc from a credit provider. It is also for the use of persons or organizations acting as consumer credit intermediaries such as advice centres, trade union officials and provincial consumer directories. It is an attempt to simplify the provisions of The Act as they pertain to the consumer. This booklet is not legally binding. Should there be any doubt about the meaning or application of any of the provisions of The Act, the relevant sections of the legislation as well as the regulations should be consulted.

The NCR Regulations act

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