When tough financial situations occur, how can you possibly find a way out of it in the most practical and efficient way? Perhaps you have considered borrowing from your family members or closest friends, but then it is not exactly the most dependable means of obtaining extra cash. The last thing you want is to put other people on the spot, particularly if you are looking to borrow a large sum of money. Then, there is the awkward feeling of approaching these people who may not be comfortable with lending cash, or they probably don’t have the amount you need.
In this case, what option is left for you? A bank loan may take long to process, not to mention the extensive paperwork that will be required of you when you submit your application. Also, you might as well forget about using your credit card to accumulate more debts than what you already have. Licensed Moneylenders may be willing to provide you with a small loan, but you have to be prepared for a high interest rate to be placed on top of your loan.
When you need extra cash right away, what should you do without putting yourself in an even more difficult financial issue? Is it really worth considering heading to the nearest pawnshop for a source of emergency funds?
In Singapore, there are hundreds of licensed pawnshops and pawnbrokers all over the city. These pawnbrokers are recognized by the Ministry of Law, and some people resort to using this option to borrow some money. But of course, you have to realize the fact that if you go to a pawnshop, there is a risk of losing your precious item in case you fail to settle your loan payments. Generally, you will need to pay back your debts within a period of 6 months, so you can claim your property back. If you are confident about paying your debts in such time frame, then it may not be so bad going to a pawnshop for your emergency needs.
Let us look into the things you can expect when you deal with a pawnshop in Singapore. This way, you can decide whether loaning some money this way is suitable for your situation.
Exchange a Property for a Quick Loan
If you want a straightforward response to your needs, then this is just what you can get from a pawnshop. There is no such thing as a long wait when you consider a pawnbroker for an access to additional cash. It basically works this way – you head to the pawnshop with your valuable piece of jewelry or even an expensive gadget. Then, the broker will evaluate the item before he gives you a certain amount of money.
Let’s say you have your $15,000 luxury watch, which you want to temporarily exchange for money. The broker may value the item at $10,000. Then, you can take out the said amount and be sure to pay it off according to the timeline set by the broker. As you have noticed, the value given by the broker for every item you present to them is at least 60 to 80 percent lower than its actual worth. This is why you can never expect to get exactly the amount your item is actually priced at.
To keep it simple, you go to a pawnshop to borrow money. You are not selling your item to them to get some cash, but there is a service they offer where clients can sell valuable products. This is ideal if you are not planning on taking it back in the future. Basically, you will have to pay the amount borrowed within 6 months. If you are sure that you will have the money by this time, then there is nothing to worry about taking the offer and leaving your item to receive the loaned amount. And here’s another thin – whenever you pay a portion of the amount, the 6 months is automatically reset. This is why you only run the risk of losing your important item when you fail to settle your loan payments on time. Once this happens, you can say good bye to the item as it will already be auctioned off by the pawnshop. It is their way of recovering the amount loaned from them.
Determining Singapore’s Cost of Pawnshops
Wondering about borrowing some money from a pawnshop here in Singapore? You will be surprised to know that it it quite reasonable. There is an increasing growth of pawnshops in the country, and this has resulted to greater competition between pawnbrokers. This is why the rates offered have become more competitive than ever. These pawnshops aim to attract more customers, which explains the decline in the interest rates. Moreover, the items they evaluate are given a higher value to encourage more people to consider their service. For instance, the typical interest rate charged by pawnshops in Singapore are at around 1 to 1.5 percent per month. This is a good rate, considering the fact that credit cards offer a 2 percent interest rate.
Get the Cash You Need – Real Quick!
Since your pressing financial concern just cannot wait any longer, there is no time for you to consider a financing institution that requires you to go through hoops before the amount of money you need reaches your bank account. Thus, pawnshops become even more appealing to people since there is no long wait involved when it comes to borrowing money.
A pawnshop has become a practical alternative to banks if you are in need of a personal loan. There is no such thing as presenting proofs of your income or identity before you can get the amount you need. Simply present something valuable to the broker, as this will serve as the collateral for your loan. You can receive some money immediately after you show your valuable item since brokers are aware of the fact that they can sell it in case you fail to repay the loan. There is no risk for them indeed.
Banks take weeks before you can receive your loan. On the other hand, pawnshops are ready to give to you cash instantly as long as you present to them your collateral. So, you can walk away without anything to worry about because you can already settle that debt waiting to be paid once you have the loaned amount you need. Otherwise, you can always approach licensed moneylenders in Singapore as they are swift in their procedure and you may just get the loans such as personal loan and payday loan on the same day as well!
Additional Facts about Taking Out a Loan from a Pawnshop
If ever your valuable piece of jewelry or other property is sold during an auction, yet the selling price was much higher than what you have borrowed from the pawnbroker, you will be able to receive the excess amount. If you owe $11,000 from the pawnshop (including interest rates and other fees), yet the watch you have pledged is auctioned off about $1000 more than the loaned amount, there is a guarantee that the extra $1,000 will be all yours.
Of course, this is much better than simply losing your expensive watch, but it is not always an advisable thing to do if the item means so much to you. After all, if you have your heart set on selling the watch, you may do it elsewhere that can ensure you of a higher value for the item. Going online to sell the item on your own may even be worth it, not to mention the possibility of bypassing interest rates and fees that pawnshops require. In the end, you can make more money from selling the item on your own at your preferred seller. So, while pawnshops can guarantee you of fast cash, there are still some things to think about before you simply take the plunge and exchange a valuable property for money.