Looking for information about pawnbrokers in South Africa

After centuries on the fringe of consumer finance, the main road pawn shop is
pushing its way towards the mainstream, providing a viable alternative to banks
and financial institutions.

As pawnbrokers in South Africa provide loans speedily, more
consumers, even those with other short-term loan options, are finding that the
simplicity of the pawn shop has its appeal.

So who are pawnbrokers, and is it really a safe and secure way to get cash?
Understanding the process of pawnbroking, both pro’s and con’s is fundamental
to get the best deal.

Please note the information in this article may vary depending on the pawnshop
or credit provider.

How do I get a loan from a pawnbroker?

Simply put, to secure a short-term loan from a pawnbroker, you will need to
provide them with an item of value for their own monetary security for the cash
you need. Within a certain contractual period of time you may redeem it for the
amount of the loan, plus some agreed-upon amount for interest.

The process of pawnbroker loans

  1. Your item of value (known as your pawn, buyback or pledge) must first be
    given to the pawnbroker and they will determine its worth.
  2. As a new customer, you should be given a “pre-contract credit form.” You
    should always ask for this, even if you have loaned from the company
  3. Once credit agreement is provided, you should examine it thoroughly and
    inquire about things that aren’t clear before signing it.
  4. The document should provide you with all the details: the cost of taking
    the loan and the length of the loan period.
  5. You should be given a pawn receipt, which must be held onto as proof of
    your ownership of the item, unless the item is mentioned in the credit
  6. If you have paid what is owed to the credit provider, the item can be
    retrieved at any time. However if the loan is not paid off within the agreed
    time period, the pawnbroker has the right to sell your item to recover their
  7. If by chance you wish to cancel the agreement, you will only have to pay
    the interest for the small period of credit.

How does the pawnbroking process work?

  1. Pawnbrokers charge interest rates that are less than payday loans, yet
    may have slightly higher rate than local South African banks.
  2. The pawnbroker may quote you a monthly or even daily interest rate, yet
    you will always be provided with the annual interest rate and the annual
    percentage rate of charge (APR) as figures to reference. It is advisable to
    look around to find the best rates for you.
  3. Pawnbroker’s loans are normally paid off in one big payment and not in
    small portions.
  4. Some pawnbrokers may agree to lengthen the period of payment and
    write up a new credit agreement if you need more time for repayment, but
    they have the power to reject this.
  5. Pawnbrokers will generally require you to at least pay your interest owed
    to them.

What can you pawn for a loan?

Any item of worth that can be sold again could be pawned. Electronic devices
and jewellery are common items, yet you can pawn anything from designer
watches and powertools to antiques.

The advantages of pawnbrokers

  1. It is usually easier to loan money from a pawnbroker than other lenders if
    you have a bad credit rating as there are fewer credit inspections and
  2. The process is speedy; your loan is usually given to you on the day you
    apply for it.
  3. You should be able to withdraw your item at any time if you have paid off
    the loan amount and interest for the period you borrowed the money.
  4. If your item gets sold by the pawnbroker and its worth is less than the
    amount that was given to you, you are not liable for the shortfall.

The disadvantages of pawnbrokers

Loaning money from a pawnbroker can be costly.

Generally, you can only borrow a portion of the worth of the item you wish
to pawn. For example, if you have an item valued at R200, you may only
be able to loan R100 for it.

What if you can’t pay the loan back?

  • If you are unable to repay the loan by the end of the given period and you wish to
    redeem your item, you can try to negotiate with the pawnbroker to extend the
    time period, yet they have no obligation to accept your request.
  • Ownership of your pawn will be passed on to the pawnbroker if you are unable
    to repay the loan.
  • Yet if you loaned more than R75, the pawnbroker may sell your goods and keep
    the profits. However, they must try to get the highest value for the goods. If there
    is remaining money left over from the sold goods after your debt is deducted,
    this money must be given back to you.
  • If you have borrowed over R100, the pawnbroker is required to notify you if they
    are going to sell your item, giving you the opportunity to repay them and redeem
    the item.

What happens if you can’t find your pawn receipt?

When your loan is under an agreed amount, you may request a “standard form”
that you can sign to declare the item is yours.

But if you loaned more the agreed amount, a statutory declaration will be
needed, which may require you to go to a magistrate or Commissioner of Oaths.
A lawyer may also be able to help you, yet they can be costly.

Credit providers are liable for the loss if your goods are stolen while in their

  • If a credit provider fails to return the goods, consumers can apply to the
    Consumer Tribunal to have an amount equal to the fair market value of the
    property, less the settlement value at the time of failure to deliver that
  • You should first write a complaint to the pawnbroker, using proof through
    written quotes and newspaper clippings to reinforce your case.
  • You also have the right to take the pawnbroker to the Small Claims Court,
    however, this can be costly and the outcome of the settlement may be
  • Importantly these provisions apply to all credit providers, whether
    registered with the NCA, or not, so consumers have recourse in all cases.

Cash Converters Cash Advance

With Cash Converters Cash Advance, you can receive an instant loan by pawning
your goods with us. Our policy requires no credit application or proof of
employment, giving you the freedom to take out a loan of up to R20 000 with
ease. Our straightforward loan conditions give you the opportunity to borrow
money fast. With Cash Converters, your cash loan can be presented to you in 15
minutes. This opportunity is open to people in South Africa of all nationalities,
over the age of 18.