Are You Safer Getting A Loan From An Online Pawnshop?

A professional PawnHero appraiser takes measurements of a designer bag pawned through the pocket pawnshop.

Majority of Filipinos are still unbanked - only 3 out of 10 have bank accounts of which only 5% have credit cards. This poses a serious problem for the average citizen who has no access to basic credit and financial services.

For many years, pawnshops have acted as a key player to solving the problem of inaccessible credit by becoming a gateway to fast cash. Every day, local pawnshops help Filipinos make ends meet by giving out small loans against collateral items like jewelry, electronics and watches. The assistance even extends to some entrepreneurs and business owners who attribute a share of their success to loans availed from pawnshops.

Despite the benefits, however, pawnshops have been plagued by negative press due to the threats they constantly face. Since most operate multiple branches, which are actively advertised, pawnshops become vulnerable to incidents of robbery and theft. Just recently on the news, one establishment in Cebu was broken into by robbers pretending to be customers eventually escaping with a loot of nearly half-a-million worth in cash and items.

The internet has allowed many businesses to change consumer behavior by operating using a digital platform. Just a few years ago, none of us were booking car rides on our smartphones or purchasing products via the web. This same kind of innovation is what we are seeing in the pawn broking industry today with the emergence of online pawnshops like PawnHero.ph - the first one in the Philippines. But are they safer than their traditional counterparts?

Online pawnshops offer the same service as traditional ones but operate in a more technologically modern way. Brick-and-mortar shops require customers to physically bring themselves to the establishment, but with a virtual pawnshop everything is transacted online. Instead of having customers to bring their items to a branch, it’s the online pawnshop who goes to the consumer’s home.

In an interview about the safety of online pawnshops, PawnHero.ph chairman and co-founder, David Margendorff, illustrated three primary security benefits. First, the risk of theft and robbery is eliminated given there are no physical branches; second, all items are stored in a secured location with 24/7 security personnel and CCTV cameras not exposed to the same level of risk as branches on the street; finally, customers don’t need to leave their homes which also makes it more convenient.

“PawnHero is disrupting one of the oldest industries in the world with technology and is literally putting a pawnshop in everybody’s pocket. Filipinos no longer need to travel to a pawnshop, fall in line and return to renew or redeem their item,” Margendorff said.

How to get a loan from an online pawnshop
Transacting with an online pawnshop eliminates the hassle of going to multiple establishments in search of the best deal. In the instance your item gets rejected, you will not have spent so much time and energy commuting through the horrendous traffic conditions of Metro Manila.

To demonstrate how to get a loan from an online pawnshop, PawnHero.ph provides an easy to understand, step-by-step guide for customers.

Step 1 – get a loan offer. Choose which item you wish to pawn through the pawnshop’s website. PawnHero will show you how much you can loan against your chosen collateral.

Step 2 - schedule a free and fully insured pick up. The next step is to choose a loan duration and to indicate where to pick up the item. An authorized personnel called a PawnTrooper, will arrive on schedule at your preferred location.

Step 3 - get the money. Once the PawnTrooper delivers your collateral to PawnHero’s warehouse, it will undergo a physical examination. If all is well and as initially described by you, the loan proceeds will be deposited to your bank account or other chosen payout method.

Step 4 – get the item back. As customer, you may repay your loan at any time on or before maturity date. Once paid, the item will be delivered back to your preferred address for free and fully insured. If you need more time to repay simply request for a renewal of your loan.

Choosing the right online pawnshop
When choosing an online pawnshop, make sure that they are licensed by the Bangko Sentral ng Pilipinas or BSP to avoid transacting with unqualified institutions. Next, check for transparency regarding interest rates and charges by reading the information found on online pawnshop’s website. Read testimonials of customers who have already undergone the process of that company for a second-hand experience of the process. If you are satisfied with the experience prior to the actual transaction then it’s likely that you’ve found the right online pawnshop.