Pawnbroking, as an alternative financial service, plays an important role in the economy and community and in serving the needs of Singaporeans.
There are many features of pawnbroking which appeals to Singaporeans:
Simple and Fast.
You will appreciate the much shorter time involved in obtaining a cash loan through pawning, which may take anywhere between just a few minutes to an hour, depending on the complexity of the collateral.
There is no need for stringent credit scoring procedures and months of waiting for credit approval to receive a loan.
Your loan is disbursed on the spot. This makes pawnbrokers a much more convenient way to get a loan for those who have an urgent need for cash.
Pawning offers funding flexibility as it allows you to obtain finance on demand and to recover your pawned items anytime.
As long as the loan amount is less than the value of the pledged articles, you have the flexibility to loan the amount required as well as repay partial, in full or do multiple extensions beyond the 6 months loan period.
You can reclaim your items early if you pay back the full loan amount and interest up to that day. This is quite handy if you have an event to attend and would like to wear the jewellery that you pawned.
Costs and fees.
Furthermore, pawning, as an alternative financial service, does not charge hidden or extra fees, making it a much more straightforward process.
There is no additional set-up and processing fees, lock-in options and commissions.
You are charged on pay-as-used of not more than 1.5% interest per month or part thereof, as stipulated by the law.
Nature of pawnbroking loans.
Pawnbrokers provide temporary cashflow facility using fully owned jewellery.
In other words, pawnbrokers help convert your jewellery into cash, while allowing you to retain the title to your personal property.
Micro form of secured lending.
The revenue model of pawnbrokers resembles that of banks. Mirroring the traditional financial sector, pawnbroking provides similar services.
Pawn loans are secured lending collaterised by gold, diamond or branded watches.
Like banks, pawnbrokers are tightly regulated. Pawnbrokers are regulated by the Ministry of Law whereas banks are regulated by the Monetary Authority of Singapore.
The licenses for pawnbrokers are renewed yearly, bi-yearly or every three years. Under the tight regulation, you may pawn at your licenced local pawnshops with a peace of mind.
The pawnbroking industry has been in existence in many countries for hundreds of years, and in Singapore has been around for over a century.
It has helped fill an essential financing gap for secured loans which finance institutions do not offer, especially for individuals who are unable to meet the stringent credit criteria of finance institutions.
Pawnbroking is a popular essential financial service with high demand in Singapore.
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