How a Pawnbroker Loan Could Get You Through the Month

How a Pawnbroker Loan Could Get You Through the Month

A Recent Posting looked at ways to obtain funding for those who are desperate for a loan that have been turned down wherever they have applied. This is a common issue for many with a very poor credit score who are unable to use guarantor or logbook options. That referenced post looked at basic ways to earn emergency funding including selling DVDs to CEX and cash for clothes shops were also discussed. The problem in either of these scenarios is that the available sums may not be enough to see you through the month. If more money is required, then this is where pawnbroking can come to the rescue.

The pawnbroking industry continues to thrive more so than ever before. Within the high street lenders category above, you will find that most of those featured companies offer a range of financial products including pawnbroker loans, whilst others are specifically specialised in this sector such as H&T who is the UK’s leading chain. To obtain money this way, you will have to head directly to a store, although you will find these on most high streets. Within this post I will share one of my own personal experiences when using a facility like this that will also give you an idea of the costs and the process involved.

A pawnbroker loan is secured against personal belongings that have moderate to high value that could include jewellery, laptops, memorabilia and so on. Due to this security there are no credit checks to worry about. If you have an item of value then all that’s required is some basic identification. All that I needed to show was my driving licence and a recent utility bill. Once an item (or items) have been sold, the ability will be there to buy back at a later date. If you do this then interest is added, or otherwise they will keep hold of the goods if you don’t head back to them.

With my past experience, I was being paid in just over a week and I didn’t have a penny to my name. I was unable to find credit elsewhere and was in desperate need at the time. I headed to a Cash Converters where they offer buy back schemes that work in the same manner as a pawnbroker loan. My laptop at the time was working fine and it was a decent model, but the headphone jack was broken. This is an easy fix though for anyone techie. I explained this to them as soon as I went in and they were happy to proceed with the testing lasting just 5 minutes.

I think that it helped that I did clearly state that I only needed to get through until I got paid and wasn’t looking to sell outright. I was offered £70, quoted a repurchase price of £92.75 and was told that the laptop would be held for 28 days, although I needed much less time than this. When I arrived I paid back the £70 alongside £22.75 interest. Based on this sum, the pricing worked out at £32.50 per £100 for 1 to 28 days. The £70 received was average, but I knew that I would reclaim my laptop soon and it also wasn’t in perfect condition.

CEX usually pay around double than what Converters/Generator pay. I did at the time receive a quote on their website that was around £140 that ties in with this estimation. The problem with CEX is that there is no such buy back option available. If you are selling DVDs, games etc then the selling process is simplified, but it is a different story with a laptop that is understandable due to the generous pricing that they offer. I did pop into one of their stores and I quickly told them about the headphone issue and the staff member told me that they wouldn’t be able to purchase due to this.

It was a good idea that I told them about this, as their testing would have taken more than 2 hours and after this I would have been turned away. They may pay top dollar, but having no pawnbroking facility is not ideal. They are as noted very picky when it comes to testing higher value electrical goods. In comparison, with Cash Converters the testing took 5 minutes and I could later repurchase. Although you can receive more money when selling outright elsewhere, you will receive less with pawnbrokers since they have to recover the item’s value should you not return. Most claim to purchase items at 70% of their value.

As an update, at a later date I used Cash Generator as this was the only store open on a Bank Holiday. When I went in I quickly showed them the buy back receipt from their rival and told them that I just needed a temporary loan. They were quick to quote a price and I forgot to tell them about the headphone problem that didn’t matter since they tested for just a few minutes and they knew that I would be returning. They offered me £100 that as you can see was much greater than the £70. Would they have offered £100 if they were aware of the headphone issue?

This is unclear, but it did seem apparent that they were looking to edge out their major market rival. The 28 day repurchase charge here was £32 for the £100 that they offered that I later took on (this was slightly improved to the £32.50 fee above). So they are a little cheaper and they did offer more money although as noted this could have been more balanced. If you are looking to get through a rough patch then using a pawnbroker loan or any kind of similar buy back service is highly recommended. Otherwise for selling outright, CEX, EBay or Gumtree should generate the best bang for your buck.