Pawngo lets online denizens use their valuables as collateral to secure short-term loans for up to $250,000 -- and all without leaving the comfort of their own homes. The startup has loaned more than $1.3 million to beta testers prior to its launch.
"Our system lets you use the items you already own to get a loan that won’t get you into trouble down the road," Pawngo co-founder and CEO Todd Hills says.
Would-be pawners describe the items they'd like to pawn, upload photos and enter their contact information. Pawngo follows up with a loan offer or estimate for buying the item in a few hours, using real-time and historic pricing data to determine resale value. Should the user accept the offer, he then prints the prepaid FedEx shipping label and sends the item to Pawngo for confirmation. After that, Pawngo wires the funds to the user's bank account.
The startup issues what it calls "short-term, low-interest" loans -- up to six months at 3% to 6% interest -- from $250 to $100,000. It stores and insures all the items in its care and returns them to the user once the loan is paid off.
By taking the pawnshop off the streets and on to the web, Pawngo hopes to lessen the stigma associated with walking into a sketchy pawnshop. The idea would appeal to an audience who would otherwise avoid pawning their collectables.