People have been using pawnshops to lend money for centuries. Thanks to the internet, this form of lending is going into the next century. The internet has made pawnshop lending quicker and easier than ever before. Most people in the industry predict that in the next 5 years, people will be pawning or selling their valuables to pawnbrokers online. There is already a growing number of pawn brokers who have brought their business online, you only have to google “pawn shop Melbourne” to see how many Melbourne based pawnshops have online stores. It might be worth your while to browse through a few of these to see what they have to offer.
Pawnshops are an alternative to bank loans. They are also a better option than nasty high interest payday loans however, they require you to bring something valuable as collateral. If you have something to lose, you should take your time considering it and ask yourself these important questions:
- Do you need the money?
- Will the loan be sufficient over the short term?
- How would you feel if you don’t get your valuable item back?
Let’s start with the first question.
You wouldn’t be asking for a loan if you didn’t need the money, so the answer at this point should be yes. Pawnshops aren’t meant to be the first place that people turn to for money. You also need to borrow from a pawnshop only for essential things, not a holiday you suddenly feel like taking. Pawn loans should be treated as a short term solution, not a long term fix. Whilst most pawnbrokers offer repayment periods ranging from 30 days to 6 months, some might extend the period if you experience paying off the loan within that time frame however the interest can be huge. If you have long-term money problems, a long term loan is the best solution because you can pay it off gradually.
How would you feel if you couldn’t get your pawned items back?
If you are in a serious financial bind it is quite possible for you to default on your loan repayments which means losing what you pawned against. The important thing about getting pawn loans is to never pawn an item you cannot afford to lose.
Online pawnshops vs high-end pawnshops
If you are going to use a pawnshop Melbourne and you had a choice between an online pawnbroker and a high-street pawnbroker, you will find that the online pawnbrokers offer a superior service. They will give you cash much quicker for lower interest rates than high-street pawnbrokers. Unlike most high-street pawnbrokers, online brokers will not penalise you for paying your loan off early and retrieving your item before the agreed time.
What can you pawn?
In theory, you can pawn anything of value but have a look at things that are currently more popular to get as much as you can.
Is it better to pawn or to sell gold?
If you have gold and you need to make money rather than loan, then you should sell your gold. Check the price of gold and try to track the trend. It might be possible that the time is not right, that the price is too low but is likely to go up at some point.