MoneyMax, ValueMax, Maxi-Cash – 5 Things You Need To Know Before Pawning Your Jewellery And Gold At Pawnshops
Getting a loan can be difficult. Despite the present measures issued by the Government to help smaller businesses and people tide within the economic fallout from COVID-19 like the Temporary Bridging Loan Programme, there are still many people can not raise enough cash until the end from the crisis.
Other than banks and licensed moneylenders, the latter which may ask you for a leg and a leg to get a loan, you may also consider pawnshops such as Moneymax, ValueMax or Maxi-Cash in order to get a short-term loan to tide over trying times. Here are 5 what exactly you need to understand before offering up your jewellery and gold as collateral for cash upfront
#1 Address it Like a Collateralised Loan
Pawning your jewellery and gold means putting your items up for money for fast money in the type of financing. Pawnshops charge competitive interest rates (1.5% monthly) – because your jewellery is the collateral, but treat it like a last measure, because they will not be free and they are more when you have bad credit ratings to get low-cost loans from banks. However, interest rates are still very high so use with caution.
|Personal Loan (Bank)||Credit Card||Pawnshops|
|Interest Rate||0.3% to 2% (monthly)
3.6% to 24% (per year)
|1.25% to two.3% (monthly)
15% to 27.6% (per year)
|1% to 2% (monthly)
12% to 24% (per year)
|Tenure (mths)||12-60||1 month (late charges may apply thereafter)||6 months (extendable upon partial repayment)|
|Eligibility||More attractive rates for higher-income earners||Most cardholders need to earn at least $30,000 per year||Need to own items of value to be pawned|
#2 Be aware of Value Of Your Gold And The Individuals who Want Your Gold
Understanding how much your gold may be worth can give you a significantly clearer estimate on how much you will get for your bit of jewellery or gold. The larger the gold purity for the jewellery, the higher the amount borrowed you could get for pawning it. Listed here are probably the most standard karats as well as their respective amounts of purity:
|Number of Karats||Parts of Gold||% Gold Purity||Millesimal Fineness|
|10K||10/24||41.7||416 / 417|
|14K||14/24||58.3||583 / 585|
|22K||22/24||91.7||916 / 917|
Comparing Pawnshops Against Goldsmiths
Pawnshops take 10 to 20% from the purchase price when issuing loans. Think of it as the premium for the “counterparty risk” they're taking on once they issue loans for you in return for your jewellery or gold. Thus, in case your jewellery or gold may be worth $3,000 for instance, you will likely be able to take a loan of $2,400 to $2,700.
A goldsmith will give you more attractive rates for trade-ins, but you are effectively selling your jewellery and gold instead of with them as collateral for a loan. In this instance, the goldsmith acts as an exchange for you to purchase and sell gold as opposed to a liquidity provider.
#3 Flexible Repayment Schedule, Typically Giving You Six months To Redeem Your Item
Pawnbrokers usually offer a monthly rate of interest of just one.5%, meaning a yearly rate of interest of 18%, that is nearly as high as charge cards. Additionally they usually give you as much as Six months to redeem your item, failing which they will put your item up for auction. You might redeem your item anytime if you are paying the eye.
If you are unable to pay up the entire interest within Six months, you may also extend the loan tenure by looking into making an incomplete payment. Do be aware that the 1% to 2% monthly rate of interest causes it to be very expensive to maintain the borrowed funds beyond a year. For longer-term loans beyond annually, it would be better to obtain a personal bank loan instead.
As sign, UOB includes a personal loan that permits you to borrow amounts starting from $1,000 with a 3.68% interest per annum, although the effective rates of interest are higher. When compared to pawnbroker's 18% interest per annum, an unsecured loan from the bank is still a far greater option for long term borrowers.
#4 You aren't Held Personally Liable If You Default
Unlike personal loans from banks which you are personally liable for in the event you default (i.e., the bank can sue you to definitely recover your personal loan debts), you aren't held personally liable for anyone who is unable to pay your loans. The pawnshop only will sell your jewellery and gold and will pay out the extra of the proceeds (if any). Should you default on a personal bank loan from the bank, the financial institution can repossess your assets to recover owed monies and, in certain cases, may make you initiate bankruptcy proceedings. Pawnshops will not be able to file a lawsuit you for use on your assets. Instead, they will put your items on auction as a way to recover owed monies.
#5: Much more Doubt, Check For License
Pawnshops in Singapore will also be regulated under the Pawnbrokers Act. This means that they are required to keep a license to stay legally operational. Thus, check for his or her license before pawning your jewellery or gold, to avoid falling prey to scammers and unregulated moneylenders.
As a final word of caution, it might be tempting to take out loans upon your valuables for any rainy day, however the interest rate you spend back to pawnshops might not be worth the amount of cash loaned in the finish. For shorter term loans, pawnshops are a good choice to consider if you will find the ability to repay the borrowed funds inside a short time.