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  • A pawnshop owner lends money to a customer in exchange for a valuable watch. The customer fails to repay the loan

A pawnshop owner lends money to a customer in exchange for a valuable watch. The customer fails to repay the loan within the agreed-upon time, and the watch is sold by the pawnshop owner. However, the sale price of the watch exceeds the outstanding loan amount. What happens to the excess amount?

Option: 1

It is kept by the pawnshop owner as profit


Option: 2

It is returned to the customer


Option: 3

It is used to cover any additional interest charges


Option: 4

It is donated to a charity of the pawnshop owner's choice


Answers (1)

best_answer

It is returned to the customer. If the sale price of the pledged item exceeds the outstanding loan amount, the excess amount must be returned to the customer. The pawnshop owner is not entitled to keep it as profit. Hence correct option is b.

Posted by

Irshad Anwar

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