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How Pawn Shops In Singapore Work

Do you want urgent cash? Find out the interest rates Pawn Shops in Singapore charge and the pawning procedure to get the money you need.

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How Pawn Shops In Singapore Work

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  1. How Do Pawn Shops Work, Pawn Shop Loan Interest Rates And Quick Cash Alternatives In Singapore Sometimes, we need cash urgently. You never know when there could be a medical emergency or if you will be retrenched. In Singapore, there are many ways of sourcing for cash. Some Singaporeans prefer to apply for short-term loans, others take out credit cards, and still, there is a group that prefers to go to pawn shops. How Pawn Shops In Singapore Work •You need to pledge a valuable item such as jewellery, gold, electronics or even branded bags. Gold jewellery, Cartier, Nikon cameras, Kate Spade wallets and Hermès handbags, ring a bell? •The pawn shop will do their valuation of your item, after which they will lend you cash of up to 80% of the value of the asset that you have pledged. For example, if you have a watch valued at S$12,000, the pawn shop may place it at S$8,000 and issue you with a loan amount of approximately the same figure. •You will have six months to repay the loan. Interest will get charged on 1% per month for the first month and 1.5% per month for the following months.

  2. •Whenever you make a payment on the loan, your repayment period will get extended by another six months. •After six months, if you have not made any single repayment on loan, then the pawn shop will auction off your asset. Pawn Shops In The Past Vs. Pawn Shops Today In the past, pawn shops were not very popular in Singapore because they were associated with people who had severe financial problems. Most pawn shops had metal bars between the staff and the customers. This was to keep the shopkeepers safe from robberies. However, in more recent years, pawn shops have become very popular and more accepted as an alternative way of getting a loan. The pawn shops in Singapore now display their gold and jewellery without any barriers. Today, pawn shops look more like jewellery shops with glass windows and display panels. They advertise their brand aggressively and can be found at many shopping malls and MRT stations. If you are planning to visit a pawn shop, there are a few vital facts you should know. 1. Interest rates charged

  3. Pawn shops charge an interest rate of 1% per month for the first month and after that 1.5% per month for the following months. It means that the longer you take to repay your loan; the more interest you will be charged. 2. It is a good option if you are unable to make repayments If you know you will have significant challenges in making repayments on loan, the best option will be to visit a pawn shop. Once you have pledged an item, the pawn shop will auction off your item to settle the debt if you fail to make any payment within six months. The consequences would be more devastating if you defaulted on a loan taken from a bank or licensed moneylender. 3. Do not liquidate your valuables through a pawn shop Pawn shops are helpful if you need some quick cash and you have a challenge accessing funds from a bank or a licensed moneylender. However, you should not get into the habit of liquidating your valuable items through pawn shops. There is a high chance that you will run into a loss since the pawn shop will only extend a loan of up to 80% of the value of your item. You will get a much better price if you choose to sell off your valuable objects to any other interested buyer. 4. Personal loan interest rates are lower than pawn shops Much to the surprise of many, personal loan interest rates are actually lower than the interest rates given by a pawn shop. The average interest rate offered for personal loans is 1% per month which is lower than the 1.5% per month that is provided by pawn shops. However, it is essential to note that the interest rate given by licensed moneylenders is much higher because it can go up to a maximum of 4% per month. 5. Pawn shops have fewer restrictions as compared to banks To get cash from a pawn shop, you only need to have proof of identity as well as a valuable item to be pawned. However, if you approach a bank or any other financial institution, you will need to come up with a list of documents before they approve your loan. These include documents showing proof of income, tax compliance, and even your credit history. Many times, if you fail to submit one or two of the documents required, your loan application will be declined. Pawn shops do not need all these documents, and they will give you the cash upfront once you have pledged the item and shown proof of identity.

  4. 6. You will receive any surplus cash after your item gets auctioned If it gets sold at a price that is higher than its given valuation, then the pawn shop will hand over the extra cash to you after deducting interest and fees. The law in Singapore does not allow pawn shops to keep this extra profit for themselves. Therefore, there is still a possibility of you receiving some cash even after losing your asset. 7. It is an excellent outlet to purchase gold The price of gold at pawn shops is usually lower than what you would find at a goldsmith. Therefore, if you are looking for reasonably priced second-hand gold, it would be advisable for you to visit a pawn shop.

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