Pawnbrokers are one business which is thriving on the recession. Pawnbrokers have said that they are enjoying a rise in profits as people struggle to make ends meet and struggle to be accepted for credit – often leaving them with little choice but to visit the pawnshops.

Most people visiting the pawnshops are looking for small loans around the £100 mark for a couple of weeks – usually to tide them over until their next pay packet arrives. Many of the loans are made in exchange for jewellery.

Although critics of the pawnbroking industry say that the APR on the loans is extortionate, often in excess of 100 percent, because the loans are usually for a short space of time, the interest is not so high. Also, the borrowing on an unauthorised overdraft is often higher than the rates the pawnshop offer. Pawnshops also offer cash there and then whereas some loans may take a couple of days before the money comes through. There is also the chance to buy back any of the objects pawned.

Although jewellery, in particular gold jewellery, is amongst the most popular items to be pawned, many people also pawn electronic and electrical items.

You might also be interested in reading our free guide to Pawnshop Loans.

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