Pawn loan agreement
Published by:
Netherlands Enterprise Agency, RVO
< 1 min read
Do you own or operate a pawnshop or jewellery shop? And do you lend money to your customers in exchange for their goods, gold or silver as collateral? Then you enter into a pawn loan agreement (consumer credit agreement) with them.
What information do you put in the pawn loan agreement?
The pawn loan agreement contains among others:
- the amount of the loan
- your personal details and those of your customer
- information on the item secured against the loan (collateral)
You also need to put in the terms and conditions for the agreement, for instance:
- the value of the collateral and the total amount the customer has to pay you to get their collateral back
- the applicable interest rate and how you calculate the interest
- the expiration date of the loan
- other conditions, such as whether and how a customer can extend the duration of the agreement
Your customer has at least 2 months for paying back the loan and retrieving their item.
Maximum interest rate and extra costs
You can charge a maximum interest rate, but this rate may not exceed 4.5%. You are not allowed to charge for other things, such as storage, valuation, or administration fees, besides the interest.