Even though the Monte de Piedad borrower may not have the badges of financial power, much less a credit rating, he does have something to hock. Entrepreneurs of small businesses often arrange capital investment loans for much more. Fixed by the government, the interest rate hovers around four to five percent per month, comparable to that charged by formal lending institutions. The rate of interest also varies by the type of collateral posted. The Rules of Piedad Monte de Piedad will loan thirty percent of the appraised value of jewelry, and special rules apply.
Borrowers usually have thirty days in which to repay borrowed money and redeem their collateral.
More than ninety percent of the pledged property is redeemed, if only to be pawned once again. The lending offices of Monte de Piedad are always busy, in good economic times as well as bad. Consequently, Monte de Piedad's staff learn to make skilled and quick appraisals of a broad range of property offered up as collateral. Even independent appraisers confess to using Monte de Piedad's appraisals of ordinary goods as a benchmark. Even though the redemption rate is fairly high, the sheer volume of transactions assures plenty of unredeemed loot left to stock the showrooms of the Republic's thirty-four branches.