Unlike the traditional high interest secured lenders and pawnbrokers offering consumers a quick way to raise extra cash, new peer-to-peer lender Unbolted seem to have tapped into a huge opportunity. They are offering an alternative to the more traditional, high interest lines of credit by lending against people’s personal high value, luxury assets. Their market leading interest rates range from 1.5% to 3%. This when compared to most lenders who are currently offering monthly interest rates of around 5% to 10% certainly seems to give them an edge.
To give you an idea the luxury assets that can be borrowed against include vintage cars, watches, designer handbags, gold, valuable paintings, sculptures, grand pianos…….the list goes on. They state that the service is an easy to use online service which allows the user to apply for their loan by simply uploading a photo of the asset that they want to borrow against onto the site.
Within approximately three hours of the consumer making an application to the site their valuation experts should be able to offer the would be borrower a loan against their assets which can be up to a value of £1,000,000. Once the items are received Unbolted say that within 30 minutes the money can be paid into a customer’s account. Interest will accrue daily on these loans but can be paid back and items reclaimed at any time. One thing that does differentiate them from other pawn brokers or other lenders is the fact that if the loan is defaulted on the items will go to auction. Any surplus proceeds from the auction will then be returned to the borrower by bank transfer.
The co-founder of Unbolted, Rito Haldar, describes their start up as “challenging the way people can access credit using transparent, fairer terms and a convenient and easy to use online service”.
By using an online peer to peer model, unbolted.com can reduce traditional higher costs and offer customers lower interest rates. They state that loans are secured against personal assets at a 70% loan to value and could earn an APR of 10.5% and that their service is aimed at helping those individuals who may be asset rich and cash poor.
For many people this alternative to traditional lending could be a much better way of raising short term finances at times like Christmas or when they may want to book a much needed holiday without it costing them a fortune by simply using their luxury items that in a lot of cases may be sat there doing nothing.
This business model certainly sounds like a great alternative for consumers looking to raise short- term cash and offers such a discreet way for the consumer to do so. It seems preferable to walking into a pawn shop and not only paying huge costs but also avoiding the stigma associated with this. So what does the future hold for Unbolted? Watch this space.