Pawn Shops

[alleykat]

Does anyone know exactly how the pawn shops operate in Thailand? If one were to pawn something for say 10,000 baht, how much would they try to sell it for later on?

Also is there an interest rate applied monthly? How long do they hold the goods before they sell them?

[raybkk]

Does anyone know exactly how the pawn shops operate in Thailand? If one were to pawn something for say 10,000 baht, how much would they try to sell it for later on?

Also is there an interest rate applied monthly? How long do they hold the goods before they sell them?

Asked my staff:

Item valued at Baht xxxxxxx

Point of no return depends on the shops. Some keep it 1 others 2, 3 or 4 months

They will sell you the goods back within the period agreed upon. However there is a fee payable.

Normally 2 baht per 100 Baht pawned. Per month.

I don't know if the same policy applies to Foreign.

[Misplaced]

There's actually a trustworthy pawn shop owner in Thailand - or any where else for that matter?

Edited February 19, 2006 by Misplaced

[Johpa]

There's actually a trustworthy pawn shop owner in Thailand - or any where else for that matter?

Yes, of course there are honest pawn shops most places. The negative stereotype of a pawn shop owner is underserved. Pawn shops serve as small banks issuing small loans, based upon physical collateral, to people who would not qualify for bank loans either because of their economic status or because the amount of the loan they need is too small for banks. In the west the pawn shops are heavily regulated.

The shops make their money on the interest on the loans. They make little money selling the goods on default of the loan. Yes, the interest rates are petty high as are interest rates for most small short term loans. Similar high interest short term loans can be seen at the "payday" loan shops or ask any builder who needs a short term bridge loan for 60 days. Or just look at the interest rates on your Mastercard/Visa credit card for high short term interest rates.

Dishonest pawn shops don't get many repeat customers and don't stay around too long. Most complaints are from customers who don't do the math or do the math too late.

[alleykat]

Thanks for that. Actually I guess I'm really asking a different question.

I am thinking of buying a second- hand item privately. I wasn't sure of it's value. So I took it to a pawn shop and they said they would pawn it for 10,000 baht. Does that mean it's second hand value is 10,000 baht? Or would thet try to sell it later for more, say 15,000 or 20,000?

Anybody know?

[astral]

Remember the resale value of the item you are pawning, comes into

what you can borrow. Many Thais do default and you will find the shops

have a sale every so often.

At 2% per month you are better off borrowing against you credit card,

if you have one. They charge less, around 1.75% I think.

[Neeranam]

Many people buy goods from a shop such as Tesco Lotus, paying monthly then take it straight to the pawn shop.

I'm not sure the exact way it is done or why, but I've heard of a lot doing it.

It may be because the interest on the goods is less than that of the normal money-lenders.

I only once used a pawn shop and that was to pawn a Dupont gold pen. They gave me 5,000 baht for it and I paid back 5,500 a few weeks later. The pen was worth about 15,000 baht new.

[Heng]

There's actually a trustworthy pawn shop owner in Thailand - or any where else for that matter?

Yes, of course there are honest pawn shops most places. The negative stereotype of a pawn shop owner is underserved. Pawn shops serve as small banks issuing small loans, based upon physical collateral, to people who would not qualify for bank loans either because of their economic status or because the amount of the loan they need is too small for banks. In the west the pawn shops are heavily regulated.

The shops make their money on the interest on the loans. They make little money selling the goods on default of the loan. Yes, the interest rates are petty high as are interest rates for most small short term loans. Similar high interest short term loans can be seen at the "payday" loan shops or ask any builder who needs a short term bridge loan for 60 days. Or just look at the interest rates on your Mastercard/Visa credit card for high short term interest rates.

Dishonest pawn shops don't get many repeat customers and don't stay around too long. Most complaints are from customers who don't do the math or do the math too late.

Pretty good summary. Our current rates are 1.50 to 3.00% per month. Real estate only, gold and jewelry for old customers. Trust isn't really required (locally anyway) as everything is done under contract, and all 'jot jumnong' actions are done at the land department. We can't run away with your property any more than Bangkok Bank can.

In the early days (our license is about 30 years old), it was mostly TVs and radios. Plenty of VCR's as well when they came around. We have a warehouse of a lot of old unclaimed, unsold junk (but likely still working) that might do well on eBay one day.

Edited February 21, 2006 by Heng

[steveromagnino]

Thanks for that. Actually I guess I'm really asking a different question.

I am thinking of buying a second- hand item privately. I wasn't sure of it's value. So I took it to a pawn shop and they said they would pawn it for 10,000 baht. Does that mean it's second hand value is 10,000 baht? Or would thet try to sell it later for more, say 15,000 or 20,000?

Anybody know?

Definitely a pawn shop does not pay out the full value, they pay out at some fraction of the true value; so for gold one of my friends was getting 6,000b per baht, when the real value was about 8,000 at the time. And gold is easily sold.

For something less easy to sell, like a pen, they might give 50% or less. If electronic maybe 30%. In the event they hve to sell it, they would at least get their money back then.