PITTSBURGH (KDKA) — If you need cash quickly during these tough economic times, a new online service takes advantage of an old practice.
It’s a way to use some expensive personal items as collateral for a quick cash loan.
When Michelle Willis, of Cambridge Springs, looked to get quick cash for a 14-carat gold diamond necklace, she went online to find a pawn shop.
Instead, what she found was Pawngo, an online pawn service.
“I called them, just to find out what they were about,” Willis told KDKA Money Editor Jon Delano.
Willis says she was not particularly comfortable with traditional pawn shops.
“If you go into a pawn shop in town, and you go in and pawn something and someone else comes along and sees that on there, they’re going to know it was you,” says Willis. “But if you’re going online, it’s pretty much confidential.”
It turns out that lots of middle- and upper-income folks feel the same way.
Online pawning is the idea of Todd Hill of Denver.
“If we can create a user experience online – which is where they’re doing business now; they’re banking online, they’re buying things from Amazon online, the world is all online – why not the pawn shop online?” says Hill.
It’s pretty simple. Customers use prepaid FedEx boxes to send their items to Pawngo where the item is evaluated and a cash loan offer made using the product as collateral.
Typically, the interest is three to six percent over three to six months, and if the loan is paid off, the individual gets his item back.
“About 85 percent of the people that get a loan from us actually return to get those assets,” Hill said.
Hill says online customers have higher end items to pawn from jewelry, special watches, even Louis Vuitton handbags; and with the economy and the credit crunch, the need for quick cash has never been greater.
“Some days we see over 300 requests,” he added.
For Willis, Pawngo was faster and easier than a bank loan.
Willis: “Otherwise, you have to go through the clearances for the bank; they do a credit check on you. With Pawngo, they didn’t even do a credit check. I wanted the money, and so I said, ‘Okay, I’ll take the money,’ and they said, okay.”
KDKA’s Jon Delano: “Seven to 10 days you had the cash?”
Willis: “Just about.”
Hill says that all property is kept in secure vaults, and gets returned once loans are paid off.
The average loan is around $2,000, and since June, more than $3 million has been loaned out.
He says you may get cheaper loans elsewhere, but nothing as convenient, private or fast.