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Unsecured loan problems prompt rise of pawnbroking

Unsecured loan problems prompt rise of pawnbroking

Category: Loans

Updated: 20/02/2009
First Published: 20/02/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers who are unable to obtain unsecured loans are increasingly opting to pawn possessions, it has been suggested.

According to Borro.com, over 200,000 applications are being turned down every week - including those from people with a good credit history.

Chief executive and founder of the online pawnbroker Paul Aitken stated that his company has seen increased demand as a result and is becoming "more and more mainstream".

"Lending has become the exception to every rule," he said, adding: "The bottom line is that it's now virtually impossible to get a guaranteed loan on the high street these days."

Borro.com noted that the average loan it provides is worth around £800 and is secured against an asset with a value of approximately £2,000.

This week a survey by consumer watchdog Which? revealed that almost 90 per cent of people believe banks have encouraged excessive borrowing, with only 37 per cent expecting them to act in the best interests of the economy.

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