The concept of a pawn broker arose before settlement-money relations. The first loans were made in kind. For example, a person who took cattle or grain from a usurer undertook to repay the loan after a certain period of time in larger quantities. Terms and interest were agreed in advance.

Pawn shop preceded monetary relations. In Melbourne, this service was used by the feudal nobility, small artisans and peasants. In Ancient Russia, and later in the Russian Empire, pawning was treated sharply negatively, this activity was considered immoral, and excess of interest rates was suppressed by law. In Pawn shop Melbourne you can expect the best options now.

Religious confessions have a special relation to pawn brokers:

In Islam, usury is condemned. Some Islamic countries prohibit this type of activity. Bank lending is allowed on an interest-free basis or with a low interest rate.

In Judaism, it is forbidden to give money in growth to fellow believers and compatriots. There are no restrictions for persons of other faiths.

In Christianity, usury is condemned by certain authorities, for example, John Chrysostom and Basil the Great. In the ideas of the Old Testament, debt slavery is proposed to regulate and limit. The New Testament does not prohibit the setting of interest, however, it is indicated that it is undesirable to require the borrower to repay the debt. You can Find out more about the same also.

Modern Pawning

In modern society, this term is practically not used, however, in the Civil Code of the government; interest significantly exceeding the standard (charged in similar cases) is called usurious. This is the provision of a loan at an unreasonably high interest or pledge of things.The activity of a usurer differs from the work of financial organizations in the following features:

  • The usurer can conclude contracts “in words” without documenting the agreement;
  • Illegal methods are often used in debt collection;
  • The issuance of interest-free loans is not practiced;
  • Interest is charged monthly, so the amount owed is constantly increasing.

The usurer makes a profit through high interest rates and the resale of the collateral. Large income is a positive side of activity; the following can be distinguished from negative ones:

  • Most of the debts are not repaid on time. The usurer needs to attract additional resources to solve the problem and a positive outcome is not always possible (death of the debtor, escape);
  • The collateral may be unsuitable for further sale. For example, the car is out of order; the apartment is in disrepair;
  • Against pawn brokers, there are frequent cases of illegal actions, they become victims of their clients, attract the attention of criminals, fraudsters;
  • Changes in the legislative sphere may suspend or completely prohibit the activities of the usurer;
  • Inflationary processes affect the amount of debt. Losses of the usurer may not be fully covered, even at a high interest rate.

The Lender in the Traditional Sense of the Term

Understood in general, a lender refers to any person, natural or legal, who agrees to make a sum of money available to a borrower as part of a loan. According to this definition, the term lender therefore designates institutions traditionally engaged in credit activities, such as banks or even credit organizations, but also any person granting credit to one or more borrowers.