Borro: an online pawnshop for consumers in a pinch

Given the current state of the economy, it’s timely to see a makeover of an age-old form of personal loans. Borro claims to be the world’s first online pawnbroker. The company, which was launched in August 2008, offers short term loans to customers who cannot borrow from banks or have maxed out their other options, giving them cash for jewellery, gold and memorabilia. After filling out an application form describing the valuables they wish to pawn, a borrower is offered a loan of up to 40% of an item’s value. Should they take the plunge, the borrower couriers their item to Borro, receiving their loan via bank transfer or postal order. Interest on loans accrues at 6% per month (lowered to 4% for loans over GBP 1,000), and loans must be repaid within 6 months for the pawned item to be returned, unless an extension is agreed in writing. Loans of GBP 100–GBP 100,000 are available, with Borro stating that over 85% of borrowers repay their loans on time and in full. The site brings an ancient system into the 21st century, providing a convenient form of short-term credit that could be cheaper than unauthorised bank overdrafts or payday loans. It also creates a certain degree of transparency for customers, since everyone is offered the same rate. And sending items in by courier eliminates the potential awkwardness of dealing with an offline pawnshop. Based in Oxford, Borro currently only serves the UK, though European and US expansion plans are in the cards. Spotted by: Cecilia Biemann