Because they were already in London, and her parents had taken the day off from their practice to come and get her, the Granger family all went to Diagon Alley to take care of Hermione's wizarding business as soon as possible.
Hermione dragged her parents to Madam Malkin's Robes first thing, asking Madam Malkin for a simple over-robe for both of her parents. The seamstress nodded knowingly and had her parents clothed in a jiffy, allowing them to blend into the rest of the alley seamlessly. Hermione didn't want any trouble with snobs to put a damper on the holiday.
Her mother and father accompanied her around to shops as she bought gifts for her friends. When Hermione expressed she wanted to go to the bank, her father shooed her off alone with a gleam in his eye, suggesting that he and her mother might need some Christmas shopping time alone. Hermione was so thrilled with the idea of getting a wizarding gift as a present that she nearly skipped her way across the street to Gringotts.
Gringotts was just as imposing as the last time. Taking a deep breath, Hermione opened the doors, approached the counter, and waited.
When it was her turn, the goblin standing there gave her an expectant look. It looked unpleasant. Going from what little goblin lore she had found in a book on humanoid creatures, Hermione carefully offered the goblin a respectful bow.
"I would speak with Bloodthorne," she said carefully. The goblin narrowed his eyes.
"Bloodthorne is busy," he informed her. "I would help you."
"I would wait for Bloodthorne," she told him back. "My time is my own, and I shall spend it waiting."
The goblin gave her an odd look, but he hopped down and left the counter. Hermione let out a deep breath she hadn't realized she was holding, feeling dizzy with a sense of relief. Dealing with the goblins was unnerving.
A few minutes later, Hermione saw a goblin walking towards her directly across the floor. When he reached her, he offered her a bow, and Hermione bowed back deeply. The goblin looked at her, and Hermione was surprised to see he seemed happy. The smile looked odd on the goblin's face.
"Miss Hermione Granger," he said. He grinned, showing all his teeth. "We meet again. Another exchange rate to haggle?"
"Bloodthorne," Hermione said, bowing again. She raised an eyebrow. "Not at all. There was a promise made, at our last meeting."
The goblin looked at her expectantly, and Hermione smirked.
"Loans," she told him. "We were going to discuss loans."
The smile that stretched across Bloodthorne's face now was distinctly less pleasant and much more predatory, and Hermione noted that it looked much more natural on the goblin's face than the smile had.
"Oh, yes," Bloodthorne said softly. "Let me get us a room, Hermione Granger, and we shall talk."
"So people will voluntarily agree to pay more than they borrowed?"
Bloodthorne still looked suspicious of the whole concept of loans, but there was a greedy spark in his eyes. Hermione held her patience and tried again.
"Yes. It's the concept of immediate need versus later obligations," she explained. "For example, if someone's roof falls in, they need to fix it immediately."
Bloodthorne gave her a look as if she was an idiot. "Of course."
"But what if they didn't have the money?" she challenged him. "What if it was a poor family, and they didn't have the 50 galleons to fix the roof?"
Bloodthorne's gaze was slow, measuring this time.
"You are saying they would borrow it," he stated.
"Yes. The bank would make an agreement with the family. The bank would loan the man the 50 galleons he needed now, and in exchange, he would pay back more than he took. It's called 'interest'," Hermione explained. "It can be done multiple ways. The arrangement could be that the man would pay the bank back in installments of 5 galleons a month for a year, for example – the bank would make 10 galleons interest, then. Or, the bank could agree to charge a percentage of the debt as interest, and have it accrue over time."
"How does that one work?" Bloodthorne's eyes glinted.
"I'm not entirely sure," Hermione admitted. She held up a sheaf of papers. "I brought some contracts that Muggles use for this kind of thing in the Muggle world that we could look at as examples."
Bloodthorne leaned over the table, and together they looked over the papers.
"I don't know the math to know how it works," Hermione told him. "Maybe if you have an Arithmancer? But a simpler repayment contract might go over better in the wizarding world, anyway. You say that this has never been done before?"
Bloodthorne shook his head. "Wizards loan money to each other, and to their friends, and the debt is backed by trust. They have never borrowed from the bank."
Hermione bit her lip, thinking.
"…is part of that because wizards are unwilling to borrow from goblins?" she asked, as delicately as possible.
To her surprise, Bloodthorne snorted.
"No. Wizards take from the goblins frequently. No, it is that the goblins have never been inclined to help wizards." He sneered. "However, this concept of… interest. This 'interest' changes things."
Hermione grinned. "Then it will work?"
"Oh, yes, it will work." Bloodthorne shot her a nasty, triumphant work. "It is as you said – we will have to use your account exclusively, as you alone have given us permission to use your gold for the loans, but in return, you will earn part of the return."
"Excellent." Hermione pulled another paper forward. "This is a draft of something I thought might work as a good standard contract. You fill in the numbers here – how much they are borrowing, how much they have to repay back each month, and how much is added to the debt as a late fee if they don't make a payment on time."
"Late fee?" Bloodthorne looked pleased.
"Yes. Then, here are the other terms – the terms of what the bank can seize as recompense against the loan if the borrower defaults."
Bloodthorne scanned the contract. "…if they do not pay back what they borrowed, we can take something of theirs?"
"Yes. It's called 'collateral'. It makes sure that the bank will always be paid back," Hermione explained. "If someone wants to borrow 100 galleons, they need to offer something the bank can take in case they don't pay it back. Most people don't care, because they know they'll just pay it back, but it can become very important. They might offer their house, for example, or a car. Maybe in the wizarding world, the copyright to a potion or book that earns money."
Bloodthorne's eyes glittered greedily.
"I understand entirely," he said. "I am ready."
"I have made you my exclusive account manager," Hermione told him solemnly. "I trust you will not bankrupt me?"
Bloodthorne gave her a nasty smirk.
"I will not use too much gold at a time for a loan," he told her. "I suspect that I shall have to mail you each contract for you to sign against – the Ministry is unlikely to honor a contract between a wizard and a goblin, but with you signing on the side of the Bank, there will be no legal out."
Hermione shrugged. "That's fine."
"All that remains, then, is for us to discuss your terms," he told her, "as you will be the one whose gold we will be borrowing."
Hermione straightened. This was the part she was expecting to be difficult.
"As it is your money, and you are allowing the bank to use it to gain money over time for free, the Bank offers you 85% of the interest earned, and a discounted price for any property seized by the bank in the event you desire it," Bloodthorne said, his eyes glinting.
Hermione had to bite her tongue hard to not gasp aloud. She'd been planning on offering the goblins 50/50, as they were the ones doing all the work. She'd expected a lowball offer like 35%, and to have to fight her way up to 50%. But if they were starting by offering her 85%...
Hermione's eyes narrowed.
"It's my gold, and I could do this all without the bank if I wanted," she said, putting her nose in the air. "95%, and I get any property seized by loan defaults."
Bloodthorne threw his head back and cackled delightedly.
"The witch has claws!" he exclaimed, looking at her with satisfaction. "90%, and you will have first claim to any property seized by the bank. If you choose to take it, the bank will recover the rest of the debt from your account instead."
Hermione considered. 90% was incredibly generous, in her mind. For Bloodthorne to be doing all the work, and only take 10%? He must either be expecting this to be incredibly lucrative over time or didn't fully realize how much power the bank had – there was no way Hermione had the time to be offering loans by herself. And the possibility of getting things through loans defaulting had potential. Wizarding property was expensive and hard to get.
"Deal, Bloodthorne," Hermione said, nodding.
Bloodthorne grinned. "We will sign."
The contract he drew up was kept very simple, in very simple and clear language, which Hermione appreciated. Bloodthorne signed with a different, fancier quill, and when Hermione used it, her hand burned as she signed, and she abruptly realized the ink was a shining red.
"Is that my blood?" she said, stifling a wave of nausea. Bloodthorne nodded.
"Contracts signed in blood are always more valid than those in ink," he told her. "Blood quills are banned for wizards to use." He grinned, showing all his pointy teeth. "But not so with goblins."
Hermione felt slightly dizzy.
"Thank you for all of your time," she told him, offering him a bow as she stood.
"The pleasure was mine," Bloodthorne assured her, eyes glittering. "Have a Happy Christmas."
"You too," Hermione said, as she turned to exit the room. She paused. "Oh! I almost forgot!"
"Forgot?"
Hermione withdrew a heavy bag from her robes.
"Please deposit this in my vault," she told him. "I know I don't have much in my vault right now. You can use this gold for loans immediately."
Bloodthorne raised an eyebrow, and then smirked.
"There is a way of doing these things, Hermione Granger," he told her.
He led her to a space at the counter outside the meeting room, cutting in front of many others waiting in line. Hermione watched as he did something with the galleons on a scale.
"There are 290 galleons here," he said finally.
Hermione nodded. "That's what I counted, too." She'd had to ask Professor Flitwick to cast a Feather-Light charm on the bag so she could carry it.
Bloodthorne's eyes gleamed. "I wonder what a young witch is doing, to earn so much gold so fast."
Hermione's mind flashed to the makeup and the photos Ernie was quietly selling.
"This and that," she told him sweetly.
Bloodthorne threw his head back and roared. Hermione shivered at the cackle.
"Have a pleasant day, Miss Hermione Granger," he told her, giving her an evil, pointy grin that seemed to indicate anything but a pleasant day. "I'm sure we will be keeping in touch."