Friday 17th of July 2009
A continuing number of Britons rely on pawnbrokers to see them through financially difficult times, a report has said, although another avenue people may want to consider could be individual voluntary arrangement (IVA) help.
Most of the items sold in such shops are jewellery, the Times noted, although many people may not want to sell their treasured possessions in order to get out of debt, preferring to obtain IVA advice.
Speaking to the newspaper, John Nichols, chief executive of H&T Group - which owns the biggest chain of pawn shops in Britain - said: "It does provide a much cheaper option than being overdrawn at Lloyds. If you don’t allow industries like this to thrive, then … it’s going to go underground."
Pawnbrokers work by individuals pledging a possession for a loan over a certain period. An interest rate is charged and by the end of the period, a person must have repaid the original loan plus interest.
Rather than taking on more interest repayments, Britons could prefer to use an IVA to freeze interest on their unsecured debt, allowing them to get on top of their finances.
Loan sharks are another way in which desperate individuals are trying to obtain money to keep afloat.
By Rachel Powell
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA answers may offer helping hand to cash-strapped self-employed
