Do you have a Kandinsky hanging in your home or an extra Bugatti in your driveway? What about an Hermes handbag or an Omega watch? If so, you could have them appraised and borrow against them through borro.com.
Okay, so admittedly, most of us don’t have luxury items like those, but there are other items you can submit to borro for a loan. Jewelry, gold and precious metals, antiques, and fine wine are other examples.
borro doesn’t call themselves a pawn shop, but it kinda is a pawn shop of sorts for the wealthy. If money is needed immediately, and for whatever reason the bank or other financing isn’t available or ready yet, borro-ers can get a loan based on their assets. There’s no credit check, and you can apply for a loan of up to $1,000,000.
The borro Process
Getting a loan from borro is a fairly simple process.
Basically, you apply for a loan and let them know what you’re offering as collateral.
If you’re in New York City, you can drop your items off at the borro location, but if you’re elsewhere, you can ship them for free.
borro and their team of appraisers (a roster of people with impressive credentials and many with experience at Sotheby’s, Christies, and the like) will look at your item(s) and send you an offer.
You can bail on the loan at any time until you sign the contract. Once you sign the contract and they have your item in hand, they will wire you the money within 24 hours.
The Fine Print
borro is a pretty straightforward site. Their FAQs explain most, if not all, questions including where your items will be housed while you repay your loan.
You’ll have 6 months to repay the loan, and they occasionally offer 9- to 12-month loan periods. You can also apply for a loan extension, if necessary. However any unpaid interest will be due at the time you apply for an extension, plus you will incur another set-up charge (3-5%, depending on your collateral).
The interest rates are where it gets tough. They have flat rates of 2.99% and 3.99% each month, depending on the value of your asset. The more expensive the asset, the lesser the interest rate. The maximum they’ll loan is 70% of the market value, but it can be as low as 30%, depending on the asset.
The good news is that you can pay off your loan early and avoid interest for any subsequent months.
What Happens If I Don’t Pay Back My Loan?
Since a transaction with borro doesn’t affect your credit score, your credit won’t be ruined if you don’t pay your loan back. They won’t send their Uncle Guido to come mess you up either. They’ll just sell your assets.
They’ll recover the money you owed them (including interest) as well as any fees incurred while selling the item, and then they’ll send you the rest back. They aren’t trying to profit from the sale. Well, unless you count the interest they make from your loan.
A Word of Caution
There might be legitimate times a person or small business might need fast cash and have exhausted all typical resources for getting it. Banks take too long, credit cards are maxed out, etc. But it’s important to remember that 6 months is not a long period of time either, and at a 2.99% or 3.99% interest rate, if you borrowed $10,000, you’d be paying borrow nearly $3-4,000 in interest rates.
From all angles, borro looks like a company that’s running a legitimate business. However, it’s best to look long and hard at your own finances before applying for such a loan. You don’t want to end up losing a prized possession in the process.