If you’ve never had a loan, a credit card or paid off any debts in your name, then you won’t have any credit history, or what’s known as a credit score. Banks and other lenders look up your credit history when assessing an application for finance, to determine whether to approve the loan or not.
So what happens if you have no credit score then? Can you still get a loan? No credit history is likely better than having a poor credit history, but it can make it tough to be approved for finance through the banks.
There is another option though, where your credit score, or a lack of one, actually doesn’t matter.
The answer is a Pawn Loan through a private lender.
Pawn Loans Without Credit History
Pawn Loans are provided by some private lending companies in Australia. It’s a secured type of loan where you need to leave an item of value in exchange for borrowing money. We’re not talking about pawnbrokers here, but rather finance companies that also offer Personal Loans, Mortgage Loans and so on. Not all private lenders offer the Pawn Loan option, but the ones that do will require you to leave an item of significant value in their possession until you pay the loan back. Car Pawn Loans are one example, where you put your vehicle up as security.
So, how do I get a Car Pawn Loan without a credit history?
Because you are leaving your car with the lender as collateral, your credit history doesn’t come into the equation. If you renege on your responsibilities and fail to repay the borrowed amount, the lender gets to keep your car and can then sell it or auction it off to recoup their money.
This is actually good news, as it allows you to get a loan with no credit history and when you repay the borrowed amount in full, you will then have established some positive credit history.
You can even get a Pawn Loan without a job, or if you’re employed on a part-time or casual basis. It’s not an issue.
Apart from offering up a car as security, you can also use a motorbike, truck, boat, jewellery or other valuables, expensive watches and so forth.
How Much Money Can You Borrow?
While you might have a certain amount in mind that you’d like to borrow, it’s all dependent on the value of the item, such as your car, that you are using as collateral.
Let’s use a vehicle for an example. You have a car and you bring it into the lender’s premises. They do an evaluation of it and determine the current market value is $60,000. Generally speaking, they’ll allow you to borrow up to 60% of the market value. In this example that would equate to a loan amount of $36,000. Of course, you’re not obligated to borrow that amount. You might only want $10K; an amount that’s enough for your needs and a figure that’s easier to repay and attracts less interest.
If you have enough collateral you can borrow up to half a million dollars, an amount that’s very handy for business cash flow and expansion or perhaps even a home extension.
Keep in mind that Pawn Loans are designed to be very short-term loans. You’ll only have up to about 3 months to pay back the borrowed amount, including fees and interest. If you opt for a Pawn Loan, you won’t get years to repay it. Have a solid plan for paying it back.
How To Find a Private Lender Who Offers Pawn Loans
In Australia, there are a number of private lenders that offer Pawn Loans, with Sydney being the hot spot. If you’ve been wondering, “where can I get pawn loans in Sydney?”, Cashify Loans offers some of the best Pawn Loans in the business.
All you need to do is bring in your car, motorbike, caravan, jewellery etc., and we’ll evaluate it’s worth and offer you an amount based on that valuation. There is only minimal paperwork and the application process is quick and easy.
Feel free to give us a call on 1300 933 053 and talk to our friendly staff if you have any questions.
Disclaimer: Please note this content is of general nature only and does not take into account your personal objectives, financial situations or needs. For advice tailored to your financial situation, it is advised that you seek guidance from an accountant or financial advisor. The information contained in this article is correct at the date of publication.