Pawnbrokers can be invaluable for all kinds of people who need a cash injection in a hurry and have assets available against which to secure finance.
It used to be that only small shops were available to provide this kind of secured loan – and the public may have looked upon them somewhat warily. However, all this has now changed and the pawnbroking industry is populated by reputable, accredited loan providers who are seen as a valuable addition to the financial services industry.
Despite this, many of you may be unaware of the potential benefits of using a pawnbroker to free up cash. Perhaps it is because you had previously always used banks, or aren’t aware that you may have the necessary assets to secure finance, but being out of the loop in this way may mean you are missing out on something that could have a huge positive impact on your financial health.
Let’s take a look at the benefits that pawnbrokers can provide.
1. Secured loans are typically cheaper than those from banks
If you can get a loan from a bank at all these days, it may come with strings attached in the form of very restrictive terms and conditions and high interest rates. Alternatively, if you choose not to bother with a loan and instead opt to wade into an overdraft, this will also be costly and could result in considerable debt being accrued. This is especially the case with unauthorised overdrafts, which usually have astronomical daily charges.
On the contrary, using a pawnbroker typically results in much lower rates and less interest being repaid. For example, depending on the asset and the loan value, the interest rate may vary between 2.99 and 6.99 per cent flat rate per month. Returning clients can also benefit from discounted interest rates in the future.
2. No hidden charges
When you use a reputable firm like an online pawnbroker in the UK with industry accreditation, you needn’t worry that you will end up paying charges and fees here, there and everywhere. Instead, the rates will be outlined in your loan quote before you sign up ad will include things like set-up costs, valuation fees and anything else that applies.
Consequently, you will have full control and can compare loan providers before coming to a decision about which one to use.
As Alaric Churchill, commercial director of Albemarle & Bond Plc, said in an article for Money Observer: “A huge positive of using pawnbroking services is that customers know exactly what they are paying back and when, which helps them manage their day-to-day cash flow.”
3. There will be a specified time to repay your loan
Every loan provided by a pawnbroker will come with detailed terms and conditions about when loan repayments will begin, how much each instalment will be and when they will come to an end. This takes the guesswork away and is much less stressful. In addition, typical terms for secured loans are six months, so the repayment period won’t stretch out over years like it might with a bank loan. You should even be able to make overpayments so you repay the money more quickly.
4. Your assets are returned to you once the loan is repaid
Selling items like jewellery will free up their value, but you can only do this once – and the chances are you won’t see your piece ever again. With a loan from a pawnbroker, your assets are retained in secure storage so they can be returned immediately as soon as your loan is repaid. Not only will you be able to keep your heirlooms, but you also have the added benefit of being able to use them as collateral against another loan should you need to in the future.
Why not look into using the services of a pawnbroker to meet your financial needs?