Singapore Pawnshops – How Do They Work
The Basics of Pawnshops
To get cash from a pawnshop, you need to have a valuable asset. These companies accept a wide range of items including gold, jewelry, and electronics, watches, luxury bags and so much more. The item is hocked until you repay the loaned amount. The ultimate loss is your item in case you are not able to repay. These pawnshops have qualified experts in all items and they will value the product before agreeing on a loan amount. In most cases, you need to bring along your identification for security purposes.
There is an interest on the item you have hocked and you should not expect to redeem your asset at the same price. The amount of the interest will depend on the value of the item though it will generally be 1.5%. The longer you take to redeem your item the more you will end up paying. If you fail to pay within the agreed time, the interest will keep piling and after 6 months as per the Pawnbroker’s Act the valuable will be auctioned to pay off the debt and you will get the surplus from the auction where possible.
If you have an urgent financial need, your bank will probably take weeks to process your application. In most cases, your credit will bar you from accessing a loan. A pawnshop is more accepting than a bank because you already have collateral. There are no CPF documents required, no pay slips, no credit checks and other hurdles when using a pawnshop.
Pawnshops and other Borrowing Options
Before taking a loan from a pawnshop in Singapore, it is important to understand how this works. Like in all financial decisions, you need the right information to guarantee the best rate and easy repayment schedule. Here are some basic aspects of the pawnshop industry to help you make a good choice.
If you have bad credit and your financial stability is not certain, a pawnshop is a great borrowing option. If you are looking for a quick cash option and you are not sure about repayment, this is your best option because defaulting will not lead to more debt and poor credit rating.
For long-term borrowing and better financial consultation, you are better off getting a loan from a Ministry of Law-licensed money lender like us. We offer low interest loans and flexible repayment schedules for larger loans.