How Private Lenders Are Helping Everyday Australians

By April 3, 2020 August 5th, 2020 Pawn Loan

The big banks have a habit of saying no when the average Australian wants to borrow money, get a credit card or increase their credit limit.

Fortunately, there are alternatives to the traditional banking system, private lenders who have their doors open to people seeking finance. 

In this post, we’ll discover just how these private lenders are helping everyday Australians with their cash flow, as well as covering what finance options are available for you to take advantage of at any time.

Why Choose a Private Lender?

As mentioned, private lenders don’t go through the same lending/non-lending phases the banks seem to circulate through. Private lenders often offer options that you just can’t get with a bank. Some examples are:

  • Same Day Loans
  • Small Cash Loans
  • Pawn Loans
  • And more…

Another important point to note in some cases, private lenders can be more lenient when it comes to your employment status and credit history. There is generally a lot less paperwork involved in applying for finance through a private lender compared to the banking sector as well, which saves both time and headaches.

When it comes to the private lending industry, quite often the process is so fast that you’ll have the money in your nominated bank account within an hour or the next day after you sign your contract. This is a huge advantage of many private lenders if you’re faced with an urgent situation that simply can’t wait weeks to be resolved.

There are also a great range of options available when you obtain finance through a private lender. Not everyone wants to borrow a minimum of $5,000 for a Personal Loan (the usual limit the banks have). Sometimes $500 or $1,000 is all you need to see you through. Well, you have that option with private lenders and on the other side of the coin, you also can borrow as high as $500,000, or sometimes even more.

As you are starting to see, when you decide to go through a private lender, there is much more flexibility involved when it comes to all of your options. You are also far more likely to be approved for the finance you seek.

How To Choose the Right Private Lender

Although the private sector is often a better bet than the banking system, you still need to be diligent and choose the right private lender. Australia hosts many reputable private lenders, but not all are the same when it comes to the types of finance they offer, the amount of money they’ll lend, or the criteria involved in securing the finance you desire.

You’ll want to choose a company that has a proven track record that’s positive. You can research this by studying the websites of the lenders you’re interested in, as well as doing online research and searching for independent reviews and testimonials of the company.

Another key thing to look out for is companies that are 100% Australian owned and operated. Not only will you be helping to keep the money in the Australian economy, but you’ll also find dealing with an Australian company is far more convenient if you have any questions or issues to resolve.

Also, take note of the company’s contact details. Is there a phone number and a street address? You want to be able to speak with a real person when you need to.

No matter what your current circumstances are, whether you’re employed or not, one type of loan you can apply for is a Pawn Loan. Let’s take a much closer look at this unique type of finance option.

What Are Pawn Loans and How Do They Work?

If you’re wondering where to get a Pawn Loan, you generally have two options:

  1. Go to a pawnbroker for a really small loan
  2. Apply for a more substantial Pawn Loan through a private lender

Most people are aware of what a pawn shop or pawnbroker does. You take in an item of value that you leave with them and secure a loan against that item. This is a Pawn Loan on a small scale, where people might only be looking for $50, $100, and so on. However, if you need a more substantial loan, you’ll want to contact a lender in the private sector.

With these lenders there are different types of Pawn Loans. Businesses can use company vehicles and equipment as security, while individuals can offer their car, boat or other items of value as collateral.

Just like with the pawnbroker scenario, you’ll need to leave an item of value with the lender, which will be returned to you once the borrowed amount has been paid back in full, including any interest and fees.

Generally speaking, private lenders will allow you to borrow anywhere from around $2,000 right up to half a million dollars. Of course, the item you leave for security against the loan will need to be of sufficient market value to cover the borrowed amount. Normally you can borrow up to about 60% of the market value, so if you left your car with the lender and it’s valued at $10,000, you could borrow up to $6,000 against it.

Businesses often have the scope to borrow much higher amounts and you can borrow against the value of company vehicles and even business equipment. Business Pawn Loans can be an extremely handy option when you require an instant chunk of cash to expand your business or fulfil on the promise of a lucrative deal you’ve just negotiated.

Examples of items you can bring in to secure a Pawn Loan include:

  • Your car
  • A truck
  • Other motor vehicles
  • Boat
  • Caravan
  • Business vehicles
  • Business equipment
  • Jewellery
  • Luxury watches
  • Other valuables
  • And more…

The Pawn Loan Application Procedure

If you’re wondering how to apply for a Pawn Loan in Australia, you’ll be happy to know that the process is very easy and quite fast. That’s the beauty of dealing with private lenders.

A Pawn Loan isn’t something that can simply be applied for online like a Personal Loan. You have to deliver an item of value to the lender’s premises. That item will then be assessed for its market value and condition, after which the amount you are eligible to borrow can be negotiated.

Always keep in mind that there will be an establishment fee and interest to pay, so you’ll need to factor this into your financial plan to repay the Pawn Loan in full during the allotted time; which is generally anywhere up to 3 months.

Pawn Loans are short-term loans and not loans that you can pay back over several years. You won’t want your car or another item of value tied up long-term anyway, so it’s far better with loans being short-term.

Once your application has been completed, if it’s approved by mid-afternoon – say by 3pm – you will almost always have the cash in your nominated bank account by the end of that business day. This is one of the competitive advantages private lenders have over the banks, and one of the reasons larger scale Pawn Loans are so popular in modern times.

For further clarification on what is the procedure of a Pawn Loan, it’s best to study the website of the lender and ask questions if you don’t fully understand something. Don’t be afraid to seek as much clarification as you need. After all, you’re entering into a financial arrangement and you need to fully comprehend the details of that arrangement.

No Job, Poor Credit Rating – No Problem

If you were to approach most other financial institutions for a loan of some sort you would need to be able to prove your employment and income. You would also then be subject to credit checks to see what your credit history looks like. If your employment or income look unreliable and your credit check doesn’t look promising, chances are high your loan application will be denied with a big red stamp to confirm the outcome.

With a Pawn Loan, you are leaving behind an item of value. Therefore, it doesn’t matter what your employment status is or whether you don’t have a perfect credit score. Your credit history won’t even get checked at all.

Not only does this all add up to a probable approval for your loan application, but it also speeds up the entire process, allowing you to have the money you need in rapid time. 

This is yet another way private lenders are helping everyday Australians.

Lending Criteria For Pawn Loans

You’re likely wondering what the lending criteria are to get a Pawn Loan from a private lender. In this area, there is some similarity to the banks, minus the need for credit and employment/finance checks. The criteria are very basic and expected. For easy reference, let’s list the usual criteria you’ll come across in the private lending sector:

  • An item of value to secure the loan, such as – car, motorbike, boat, etc.
  • Vehicles must be less than 10 years old and also have less than 150,000km on them
  • Item/vehicle must be left on the premises to secure the loan
  • For vehicles, registration papers must be presented
  • Applicant must be over 18 years of age and 100 point ID check completed

That’s the basic lending criteria, but be sure to check with your particular lender as things can vary.

The process of applying for and securing a Pawn Loan is incredibly easy. It’s designed to be a fast, no-stress procedure that doesn’t tie up your time, or have you running around, madly trying to find mountains of documentation.

Other Lending Options You Can Apply For

Pawn Loans are not the only option for finance available through private lenders. If you don’t have an item of significant value to put up as security for a Pawn Loan, you can always apply for a Personal Loan.

With Personal Loans, you can usually borrow anywhere from $500 up to $15,000. Credit checks will generally apply as these are unsecured loans and you’ll also need to be able to verify that you have at the very least, contract or part-time employment.

As with Pawn Loans, Personal Loans, fast cash loans, and same day loans are all processed extremely fast when you borrow from a private lender. More often than not you can be approved and have the money in your account on the same day. This gives you genuine peace of mind, especially if you are confronted with an emergency where you need cash quickly to resolve a situation.

If you plan to do some renovations or improvements to your home, some private lenders also offer you Mortgage or Caveat Loans, where you can borrow just enough to cover the costs of remodelling. Generally, these loans range from around $5,000 right up to $100,000.

The Wrap

By now you’ll fully understand just how private lenders are helping out Australians when it comes to their finances. It doesn’t matter whether you are faced with an emergency, need money to expand your business, or simply want some cash flow on hand for a myriad of other purposes. There will be a finance option that suits your needs.

The expert team at Cashify is here to help, so get in touch today to discuss your finance options.

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.