4 Ways Pawning is a Viable Source of Capital
If you haven’t noticed lately, we’ve been showing you how pawning is not the evil financial institution it’s made out to be. Aside from helping you get through those tough times in life (e.g. a medical emergency, tuition season, and so much more), getting a short-term loan from a pawnshop can help you get the capital or puhunan that you need to either get that business started, invest on yourself with a well-deserved vacation, or for that special occasion when you’re ready to commit!
With all that being said, here are four reasons why pawning is a better option to get a loan than other options out there:
1. It’s easier to get a loan approved through pawnshops
If you’ve done all your planning, forecasting, and everything in between to set your business up, the only thing next to do is actually start doing something – and that usually (read as: all of the time) needs some cash and a hefty sum of it. Believe it or not, the greater majority of Filipinos do not have access to credit from banks and large financial institutions; that shouldn’t stop them from investing in something they think is worthwhile.
That’s where pawnshops come in. Most banks will require either an existing account with them, or will ask you to go through a long and difficult process before getting a loan approved. With pawnshops, you just need to use your items of value as collateral, and you’ll get your cash soon after. Even better, pawnshops like PawnHero accept various items to use for collateral – from your typical jewelry and gemstones to your gadgets, electronics, and even motorcycles! PawnHero will fully insure all your items to make sure that they’re safe and well-kept for the duration that it’s with them.
2. Pawnshops offer varied term duration with lower interest rates
Banks will often set you up for a long-term loan duration, usually between one to three years or more. On top of that, they charge high interest rates that can range from 5% to 10%, some even going higher! But what if you only need the loan for 1, 3, 6, or just 11 months? Pawnshops can offer you that flexibility in loan duration, especially because you’re essentially just buying back your pawned item, and paying a little bit interest.
Pawnshops like PawnHero charge a 2.99% monthly interest rate on your loan (that’s one of the lowest in the industry!) and you can either cut your loan duration short or even extend it if you need more time to pay off your loan. It’s a better option that getting locked into a loan that you don’t have to or want to be in. After all, it’s best to stay debt free.
3. Pawnshops are regulated financial institutions
Unlike borrowing from a family, friend, or sometimes your employer, pawnshops are regulated by the government, just like banks. Most pawnshops are registered with the Banko Sentral ng Pilipinas, and they abide by laws and regulations such as the anti-money laundering act, a know-your-customer process, and a lot of other rules that ensures the public’s safety in dealing with pawnshops. That’s why it’s much safer and more secure dealing with a pawnshop than with people who can back out of their word anytime. That’s important when you’re giving something you really value up for collateral – you want to make sure it’s safe, secure, and you’re dealing with legitimate individuals.
To make verify if a pawnshop is a registered institution with the BSP, a couple of things you can check are: 1) the interest rate and other charges should be displayed and mentioned within the shop (or in the case of PawnHero, the website) and 2) the certificate of registration must be displayed within the store (or website) premises as well.
4. Pawnshops are easy to access
While there are a lot of brick-and-mortar pawnshops you can go to, one pawnshop is already present wherever and whenever you are and that is PawnHero! You can easily and safely get a loan from almost any item at a low and competitive interest rate via the online and mobile-enabled website or the easy-to-use PawnHero App. You don’t have to leave your house, face the blistering heat and humidity, and suffer through the traffic just to get that capital you need!
Getting an appraisal on your item is absolutely free, and you’ll get the appraisal soon after you send your pawn request. If you accept, you can set up a pick up of your item (of course, fully insured) and get your cash deposited to your bank account or PawnHero card as soon as you accept the final appraisal offer. It’s that easy, quick and simple, and for Metro Manila residents, it can all happen within 24 hours (but don’t worry, it’s only three days nationwide). So what are you waiting for? It’s time to capture that opportunity and get on that investment now!