As our nation’s economy has been declining and struggling to recover for nearly a decade, the financial industry has changed with the times. Payday loans and other short-term financing services are now common financing options for many Americans. Despite predatory practices and unreasonable interest rates, alternative funding sources are beginning to become the norm, including pawn brokers. Pawning personal items for quick cash is now so common that reality shows like Hardcore pawn and Pawn stars and even documentaries like Broke. The documentary are emerging as evidence that America’s economy is evolving in the 21st century. However, not all pawn brokers are ruthless capitalists who prey on the poor, and not all pawn shops are created equal.

Fighting the image of shady merchants and the petty loans associated with local pawnbrokers, online pawn shops seek to attract a high-end clientele who have been through tough times. By offering larger loans (up to $ 1 million) and the discretion of electronic transactions, online pawn shops seek to change the face of pawn shops and offer short-term financing to a market that has the ability to pay or at least valuables that can be resold for considerable profit. Trying to appeal to a middle-class market that is largely new to the need for such short-term financing options, the best in the business have created a new look for pawn brokering that could change the way the market goes. brick and mortar pawn shops brand themselves in the future.

The group leader in the online pawn brokerage industry is Pawngo, a company that targets the wealthy (or once were rich) who are experiencing financial difficulties and have luxury items to use as collateral for short loans. term. From Louis Vuitton bags to Cartier watches to Picasso paintings, valuable personal assets are pawned over the Internet, allowing customers who may be reluctant to visit local pawn shops the opportunity to get the cash they need with the discretion they want. Typical Pawngo loans average about $ 1,700, 17 times the pawn industry average of $ 100. (1)

Another important benefit of using online pawn shops for short-term financing is that pawn brokers do not report to the credit bureaus. If you default on your loan, you simply lose your collateral. Therefore, borrowers who protect their credit ratings can use this financing option to achieve their goals without fear of sinking deeper into financial ruin.

While pawning online is attractive for a number of reasons, the loans themselves are not yet traditional and carry exorbitant interest rates. At Pawngo, for example, the terms are three to six months, with a maximum interest of 6 percent, but that interest increases each month. So, if you keep a loan of $ 2,500 for three months, the interest owed is $ 150 per month, for a total of $ 450 of interest, with annual percentage rates ranging from 48 to 84 percent, depending on the loan amount. (1, 2) Loan extensions make this number rise even more. The loans remain pawnshop quality, just without the social stigma of being seen hoarding family jewels on the wrong side of town. All things considered, however, online pawn shops can offer very convenient loan options and positive pawn experiences for qualified borrowers who need cash quickly without risking their credit scores or reputation.

(1) http://www.smartmoney.com/borrow/debt-strategies/pawnshops-go-upscale-and-online-1304613626407/

(2) http://bucks.blogs.nytimes.com/2011/06/30/an-online-pawn-shop-that-seeks-to-go-upscale/