Online Pawn Broker – Borro

Has the bank refused you for a credit card? Can’t get someone to tide you over until payday? Find it really difficult to walk into a pawn brokers in case someone spots you? Well this might be a great way of getting cash now and worrying about how you’ll pay it back, if at all, later.

The site launched back last year and offers short term personal loans with a valuable item held as a guarantee. Gold, jewellery, even cars with a resale value over £25,000 are all acceptable pawning items. The item is checked into Borro’s site and valued. A courrier comes to collect it and then on receipt and accurate valuation, Borro dumps 40% of the object’s resale value into your bank account. Should they take the plunge, the borrower couriers their item to Borro, receiving their loan via bank transfer or postal order. The interest rate is “4% simple interest per month” (a whopping 53.8%APR), and for loans of less than £1000 charges are 6% “simple interest per month” (an eye watering 85.0%APR) but you are expected to pay the loan back in 6 months to get your item back, so it would be unfair to compare this to a longer term method of lending, such as a bank loan. Unless you fail to pay, that is!

This sitebrings a  shady and poorly marketed industry into a more modern and acceptable arena. It will be interesting to see at this time of credit crisis crunching capers whether it becomes a viable method to borrow over a short term.

Source: Borro