Question

How is a loan obtained through a pawnshop typically paid off? A. In multiple payments, and the collateral is returned.

B. In a single payment, and the collateral is returned.
C. The lender sells the item to pay off the interest.
D. The lender cashes a postdated check.

Answer 1

B. In a single payment, and the collateral is returned.

Answer 2

The correct answer is letter "B": In a single payment, and the collateral is returned.

Step-by-step explanation:

A pawn is a type of loan based on the value of the collateral. Collateral can be of many kinds but they are usually objects that have recognized value so that if the borrower cannot afford to pay the amount of the loan the pawnbroker would sell the collateral to cover the amount of the loan given. Pawns are requested to be paid in full so the collateral can be returned.