How To Get a Pawn Loan in Ecuador
A pawn loan is a type of secured loan where individuals exchange valuable goods, such as gold jewelry, for immediate cash. Unlike traditional loans that often require extensive paperwork, credit checks, and a strong financial history, pawn loans are more accessible. The growing number of unemployed individuals applying for pawn loans has doubled in 2024.
One of the key institutions offering these types of loans in Ecuador is Biess (Banco del Instituto Ecuatoriano de Seguridad Social). The following outlines how a typical pawn loan process works.
How Does the Pawn Loan Process Work?
Let’s imagine María, a single mother and small business owner, who needs $200 for a medical emergency. She owns a gold chain and decides to go to Biess for a pawn loan. Here’s how the process would unfold:
Evaluation of the Item: María brings her gold chain to a pawn loan office at Biess, where an appraiser assesses the authenticity and weight of the jewelry to determine its value.
Loan Amount Determination: Based on the appraisal, Biess offers María a loan amount that is a percentage of the estimated value. For example, if the chain is valued at $300, she could receive up to $200.
Loan Formalization: María presents her national ID, voting card, and a utility bill. She signs a contract, and the money is either provided in cash or deposited into her account.
Custody of the Collateral: The gold chain is held in custody by Biess for the loan term, which can last up to 180 days. During this period, María can make partial payments or settle the loan in full.
Recovery of the Collateral: Once the debt, plus any interest, is paid, María gets her gold chain back. If she fails to repay the loan, Biess may auction the jewelry. If the auction proceeds exceed the debt, María is entitled to the difference.
Biess is one of the leading institutions offering pawn loans, but private banks and cooperatives also provide similar financial products.olution to meet immediate needs without the usual qualifying hurdles.