Help in financial need
Pawnbroking boom during the Corona crisis
If you turn your car into cash, you can then rent it back immediately from some providers.
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The corona crisis creates financial pressure for some people. Pawn lending models can help to bridge the gap.
In most cases in which people get into financial difficulties, there is little they can do about it: customers of craft businesses are in arrears; Bills can no longer be paid due to short-time working; or short term unforeseen expenses require improvisation in matters of finance. Pawn shops are therefore booming in the pandemic – also thanks to new concepts that are geared towards practical benefits for customers.
From the silver chain to the bus
The classic model of the pawn loan is the pawnbroker on site: Valuables such as jewelry, cell phones or bicycles are handed over to the pawnbroker, who puts a certain amount on the table for them. Depending on the modality, customers then have a certain period of time during which they can trigger the item again. This is usually three months. So that everyone can find the nearest pawn shop, there are offers on the Internet such as the search engine “1,001 pawn shops”. The nationwide offer is broken down here according to cities and federal states.
Cars are also a popular pawnshop. Depending on the condition of the vehicle, customers can use them to obtain liquidity quickly and easily. Because a pawned car is usually just standing around, the provider Pfando, among others, has one Gimmick called “Cash & DriveThe car pawn shop buys cars, trucks and motorcycles, pays out the corresponding sum – and then rents the vehicle back to the customer. The customer can continue to drive the car or two-wheeled vehicle – without having to park it as in the classic pawn shop have to.
Pawn shops do not only accept everyday items or classic cars: Many also offer their services for boats, buses, tractors or vans. Each with the option of renting the vehicle afterwards and driving on.
Short or longer term liquidity
A very similar model, if not for the short-term financing gap, is now available for even larger valuables: real estate. Depending on the amount of money they need, homeowners can sell 20 or 40 percent of their house, for example, and keep the rest the maintenance costs are also with the owner.
Depending on how long and how much money is needed, consumers should also think about whether a simple loan – for homeowners on the basis of a mortgage – would not be easier. After all, the key interest rate of the European Central Bank (ECB) is for years at 0 percent – The savings, mortgage and loan rates are correspondingly low. What annoys savers makes everyone happy who has to or wants to borrow money from the bank.