Pawn shops first emerged in China more than 3,000 years ago. They were used as away to grant credit to peasants, and their operations were regulated by Imperial authorities.
Pawn shops were also popular in ancient Greece and Rome, where small merchants used pawn loans to start businesses.
But the Catholic Church had restrictions on charging interest for loans during the Middle Ages, which hampered the growth of pawn shops. However, the restrictions were loosened in the 14th and 15th centuries due to increased demands for this type of credit. European citizens wanted pawn loans to help them get new businesses off the ground and help their families get financial aid.
Pawn shops are sometimes referred to as the “Lombard” in Europe. This refers to the House of Lombard, a prominent family that was known for lending money.
Pawning also reached royalty. Edward III pawned his jewels in 1338 to raise money for a war with France. And Queen Isabella of Spain used her jewelry as collateral to fund Christopher Columbus’s first voyage to the New World.
Fransciscan monks also used pawn loans to aid the poor in the 18th century. The monks allowed people to borrow funds against collateral for no or low interest as a way to provide financial assistance to the lower class.
And pawn shops have been a mainstay in American towns ever since the country was founded. In the 19th century, American citizens pawned clothes on Monday and would get them back on Friday, which was traditionally payday.
Throughout history, pawn shops have been recognized as a great non-bank alternative for obtaining collateral loans.
There are more than 13,000 pawn shops in the United States today. They are especially popular today because of the current era of tightened credit and crackdown on banks. Additionally, pawn loans do not affect a consumer’s credit score, so they are attractive to American consumers.
Come ask us questions about pawn loans today.