Pawn Shops in Singapore | Expats Get to Know All About Pawn Shops
Loans | Personal Loans
by Priyadarshini
4 March 2021
Pawn Shops have had an image makeover from what it was perceived back in the 1980s. Those days of harsh judgment are gone and now you have more options to take out a loan. Pawn shops are on the rise and in this blog, we tell how you can easily take out a loan from pawn shops in Singapore.
You have to Pay Interest to the Pawn Shop
Yes, when you hock your item at the pawn shop in lieu of borrowing some money. You need to pay interest on the repayments. You cannot redeem your item at the same price you hocked it for. Usually, the interest rate is 1% for the first month, following by 1.5% for the rest of the months. The advantage here is that pawn shop’s interest rate is lower as compared to banks or moneylenders.
Not Sure About Repayment
If you are not in a financially stable position in life and cannot make guaranteed loan repayments, then pawn shops are the place for you. You can avail of loans from a pawn shop than a moneylender or bank. For taking up a loan from a pawn shop you have to mortgage an item of yours. And in case you are unable to repay the loan, then you have to incur the loss of losing that item. It could be a fancy watch, a costly antique item, etc. The Pawn shop owner later may auction the item to make some money.
Don’t Liquidate Your Assets
Pawn shops can be used to take out loans but not to liquidate your assets. Mostly the loan amount you can get from a pawn shop in Singapore is dependent on the valuer’s judgment. Usually, the loan will amount will revolve around 60% – 80% of the total value of the item. For instance, family heirloom items, a Rolex watch, or a piece of jewelry. Using a pawn for liquidating your assets is foolish because you will get better value from a goldsmith or trader.
Interest Rates are Higher than Personal Loans
Yes, if you need money for an upcoming big event in your life and want to take up a personal loan then we recommend you turn to a bank. Just because you have come across the idea of pawn shops in Singapore, doesn’t mean you start hocking your precious heirlooms. You should research all your options for taking up a personal loan and then decide what to choose. If you take a personal loan from banks you will be charged 1% interest whereas, at pawn shops, you will be charged 1.5%. So, choose wisely. But if your credit scores are bad and you might not qualify for a bank loan, then you can always turn to pawn shops.
Considerate Than Moneylenders and Banks
Pawn shops do not require much for lending you a loan. As long as your item is solid and precious and you have authentic ID proof, you are good to go! There are not many rules and regulations or restrictions like in the case of banks. Even if you have bad credit scores or do not have a consistent income, you will get the loan.
