Posted on 2013-12-24
If you are in need of money, you might be considering using a pawn shop in Singapore. This can be a viable choice for some, but it is not best for everyone, and it is certainly not the only option available when you need fast cash. Before you make this decision, you should learn how the usual pawn shop in Singapore works.
The Basic Pawn Shop Business Model
Most pawn shops accept items they can easily sell, such as gold, diamonds, jewelry, and watches. The reason for this is that they will lend you money, and if you do not pay it back by the deadline, they can sell the item you gave them. Of course, if you do pay back the full amount on time, you will get your item back.
The amount of money you get depends on how your item is valued. Once the pawn shop in Singapore you have chosen has valued your item, you will get cash and a pledge ticket that shows how much you need to repay by the deadline. Most pawn shops offer installment plans that allow you up to six months to pay back what you owe.
Interest and Consequences for Not Paying
As you might expect, you will be charged interest on the amount you borrow from any pawn shop in Singapore. In most cases, the interest is around 1.5 percent. So if you cannot afford to repay what you owe soon after you borrow it, and you opt for an installment plan, you will pay a little more than you would if you were to pay back the money at once.
If it turns out you cannot repay the money at all, the item you gave to the pawn shop will be auctioned off. The pawn shop will then keep as much of the profit as necessary to repay your loan, and you will be given any extra money that is made from the auction. For example, if you let a pawn shop in Singapore keep your watch after borrowing $200, and it is sold at auction for $300, the shop will contact you to give you the extra $100 from the sale.
Other Money Lending Options in Singapore
Going to a pawn shop in Singapore is not the only way to borrow money, though it clearly has its benefits. For example, if you are not sure whether you can repay the loan, a pawn shop might be your best bet because the worst case scenario is that you lose the item you pawned. This is better than defaulting on a loan or credit card. Of course, if you cannot qualify for a loan or credit card in the first place, a pawn shop might work best for now.
However, the downside is that the interest you have to pay can be expensive after a few months. In addition, if you have gold, jewelry, watches, or other valuables you can part with, you will likely make more money selling them on your own than pawning them. That means you might want to try privately selling your items first when possible.
Clearly, pawn shops are not always the right choice. You can always consider other options, such as a money lender like Sumo Credit Pte Ltd. This lender offers loans based on your income, and though installment plans are available, you can get an interest rebate when you pay off your loan early. So if you are interested in getting the help of an experienced money lender, rather than going to a pawn shop in Singapore, consider giving Sumo Credit a try.