In Australia, there are numerous ways to obtain finance, and quite a few options available. Which option you choose will likely depend on your personal circumstances, your track record with borrowing, how much money you need, and a host of other criteria.
In some cases, most finance options won’t be the most desirable or viable ones. Maybe you’re currently out of work or only working part-time? Or, perhaps you don’t have the best credit history and feel that will hamper your chances of getting a loan or a credit card?
There is always a way though.
If you own a fairly recent car in good condition, have you considered a Car Pawn Loan?
A Car Pawn Loan Explained
A Pawn Loan is a secured loan where the borrower puts up an item of value, leaves that item with the lender, receives a loan against the value of the item, and then collects the item once the loan has been repaid in full. In the case of a Car Pawn Loan, the item is a car. Other motor vehicles can be used to get a Pawn Loan as well, such as a motorbike, truck, boat and so on.
Car Pawn Loans are as simple as that.
How a Car Pawn Loan Works
The real beauty of this type of finance is you can get an instant Pawn Loan, meaning you don’t have to wait for days and days for a decision to be made. Let’s say you’re looking for a Car Pawn Loan in Sydney. Once you’ve located a local Pawn Loan provider, you bring your car to their premises, they will assess its market value, then let you know just how much they’ll be willing to lend you against your car.
If your car is worth $20,000, you won’t be able to get a loan for the full value. Typically you can borrow up to 60% of the market value, depending on the lender. In this example that would mean you would be able to borrow up to $12,000 with a Pawn Loan.
There will be an establishment fee and interest to be paid on top of the loan and most lenders give borrowers up to 3 months to fully repay the loan.
The Advantages of Car Pawn Loans
Car Pawn Loans are short term loans that can be very handy when you need money in a hurry to cover emergencies, want to expand your business, you received an unexpected bill that you can’t immediately cover or any other purpose.
When you borrow money from a bank it can take a while before an application for finance is approved. It’s the opposite when you apply for a Pawn Loan with a private lender. In this case, you’re offering up your car as collateral, so the deliberation process is extremely minimal. This means you get the money fast, often on the same day.
If you have a poor credit score or even no credit history at all, this doesn’t matter as your credit history won’t even be checked when you apply for a Car Pawn Loan.
The same goes for your employment status. You’re putting up a vehicle as security, so no employment checks are required. If you renege on the loan, they keep your car and sell it to recoup their funds. For this reason, there is very little risk on behalf of the lender, so your employment status is of little consequence.
Of course, from your point of view, you probably don’t want to lose your car, so you’ll want to have a plan as to how you’ll repay the loan. If you’re currently out of work, for example, do you have a viable way of coming up with the money to repay the loan on time?
No matter what your current circumstances, never go into a financial arrangement without first thinking it through and knowing exactly how you plan to honour your commitment.
Is a Car Pawn Loan Right For You?
If you have a car that’s less than 10 years old and has done less than 150,000km, then you will be eligible for a Car Pawn Loan. It’s a good option if you’re struggling to be considered for other finance options, or you need the money fast. It’s a unique kind of finance that has its advantages, notably speed in getting the deal done and minimal paperwork.
In the end, the choice is yours, but a Car Pawn Loan is certainly worth considering if you own a car and you’re in a position to use as security.
