Legal business where loans are made against the value of specific personal possessions

• A. Finance Companies
• B. Banks
• C. Pawnshops
• D. Retail Stores

Answer: (C)

The key idea here is lending that is secured by a specific personal possession. Pawnshops specialize in this: you bring in an item such as jewelry or electronics, the pawnbroker assesses its resale value, and you receive a cash loan based on that value. You get a set period to repay the loan with interest to reclaim your item; if you don’t repay, the pawnbroker keeps the item and may sell it to recover the loan. This model is distinct from banks or finance companies, which rely more on credit history and formal underwriting rather than using the exact possession as the primary collateral. Retail stores don’t typically operate as lenders of this type, so pawnshops are the fitting match for loans against personal possessions.