Cash Crusaders is known for giving consumers quick cash in exchange for their unwanted goods. Desperate consumers often take advantage of this exchange during difficult times, particularly after overspending in the run-up to Christmas. But now the national franchise chain has launched Pawn Express, which offers consumers the option to borrow up to R8 000, using their valuables as security.
You can apply for the loan online and within 14 hours of your submission, Pawn Express promises to contact you and direct you to your local store to conclude the agreement. They even offer a free collection service to all customers if the goods you want to use as security are too large to transport to the store.
Secured loans of this nature are appealing because there are no credit checks or bank statements required and you can use your assets as collateral without having to sell them.
The only documents you would have to provide are your identity document and, “where possible”, proof of ownership of the asset.
Legally, accredited lenders must do affordability assessments, which include calculating your credit score and snooping through your bank statements, before lending you any money.
However, Pawn Express gets away with not doing this because you leave your item as security for the loan. The loan, in turn, is based on the product that you bring into the store.
“A consumer must be careful to make sure that the type of loan they are entering into is clearly defined. If the consumer is pawning an asset, the provisions relating to a pawn transaction must apply. There are certain concessions such as the credit provider not having to conduct an affordability assessment.
“However, if the consumer retains possession of the asset, this is not classified as a pawn transaction and there are stricter provisions of the National Credit Act that must be complied with.
“Further, it must be identifiable if the entity giving the loan is in fact a credit provider and registered as such,” explains Nthupang Magolego, senior legal adviser at the National Credit Regulator (NCR).
SO, WHAT’S THE CATCH?