With more than 200,000 loans applications being turned down each week, Prime and Sub-prime borrowers are making online pawnbroking mainstream
Online PR News – 14-February-2009 – – 10th February 2009. London, England – Borro.com http://www.borro.com, today reports a sharp increase in the numbers of both prime and subprime borrowers using its services. Borro.com, which launched in July 2008, has been doubling its loan-book every 4 to 6 week over the last six months, and recently expanded its lending capacity to keep pace with accelerating demand.
Borro.com pledges to guarantee loans of up to £1m provided the customer has the assets to cover the advance – something the banks are seemingly unable or unwilling to do.
“During the past 12 months or so, many prime customers have been reverting to sub-prime lenders to secure cash advances – and it seems the situation is getting worse with even the sub-prime lenders turning down applications from credit worthy individuals,” remarks Paul Aitken, CEO and Founder of Borro.com. “It doesn’t seem to matter what your credit history is - lending has become the exception to every rule. The bottom line is that it’s now virtually impossible to get a guaranteed loan on the high street these days.”
Mr. Aitken continues, “http://www.borro.com changes all of that. We are increasingly plugging ‘credit gaps’ for prime and sub-prime consumers alike. The common denominator is that both have spent the last 15 years accumulating valuables which they can now use as collateral to guarantee short-term loans. As a result, we are becoming more and more mainstream every day.”
Borro.com’s online approach makes pawnbroking more accessible than ever. It is also discrete, safe and fast – with loans processed in 24-48 hours. The economic climate in tandem with its unique approach means that 75% of Borro.com’s clients are completely new to pawnbroking. Its average loan is now around £800 which customers will typically borrow for a period of around 3 months, secured on an asset worth in the region of £2,000.
With the lower costs of operating online, Borro.com is also able to offer the lowest interest rates in the industry when compared to alternatives such as an unapproved overdraft, or ‘payday loans’ (which can charge as much as 30% interest per month). On £1,000 loan, Borro.com charges a monthly interest rate of 4%, which is about the cost of a bank overdraft letter. Interest, however, is not compounded daily or monthly as with credit cards or payday loans, and there are no redemption penalties or credit checks.
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http://www.borro.com is headquartered in Oxford, with offices in London. The company was founded in 2008 by Paul Aitken who previously founded Movota which was sold to Bertelsmann in 2005. The business received growth funding from European Founders Fund (Facebook, Linked-In, Alando.de, Jamba!) and Eden Ventures (Apertio, Truphone, We7.com).
As the UK’s first online pawnbroker, Borro.com is changing the face of pawnbroking by offering consumers a discrete, safe and hassle-free way to borrow money against their personal valuables. Borro.com uses Royal Mail Special Delivery as well as a home collection service to lend £100 to £1,000,000 -- in 24-48 hours -- against jewellery, watches, art and sports memorabilia. Borro.com lends up to 40% of the value of items pledged by its customers for a period of six months at a ‘simple’ interest rate of 3% to 6% per month, depending on the amount borrowed. All transactions are governed under the Consumer Credit Act.
• Fee Cost Comparison: Assuming £600 loan over a three month period:
Bank Unplanned Overdraft Fees (average for three major banks)
- Interest: 5-7% (total for 3 months) = £36
- Monthly Fees: £15 per month (for 3 months) = £45
- Daily Fees: £20 per letter (max 10 per month) = £200
Pay Day Loan ( 25%+ per month, compounded interest) = £450
BORRO (max 6% per month, simple interest) = £108
For more detail on the calculation of these charges visit http://www.BORRO.com/what-it-costs.
• Loans may be repaid at any time with no 'redemption' penalty. Interest is also not compounded, but charged at a ‘simple’ monthly rate of no more than 6% (less for larger loans). Interest accumulates and is payable when the loan is repaid. Upon repayment the items pledged are returned. If a customer is unable to repay a loan at the end of the six month period and the loan is not extended, Borro.com will sell the item on behalf of the customer, with a legal obligation to get the best price possible. The proceeds are returned to the customer less the interest accrued. For information on how BORRO works, please visit http://www.BORRO.com/how-it-works.
BORRO Limited has a Consumer Credit Licence issued under Number 620035, and is regulated by The Office of Fair Trading. BORRO Limited’s registered address is is Seebeck House, One Seebeck Place, Knowlhill, Milton Keynes, Buckinghamshire, MK5 8FR and the company registration number is 6573695.
Beacon Strategic PR
Tell: +44 (0)7802 634 695