Picture this scenario: it could easily be you. Jerome and Sarah have a big year ahead: they’re getting hitched in the summer and they’re also buying their first home in the months ahead. A relatively high-income couple with good financial prospects (Jerome is a senior registrar at a nearby hospital and is readying himself for his first consultant’s job; Sarah is a fund manager in London’s Square Mile), they’ve had a blast over Christmas, as their credit card spending now rather painfully demonstrates. Jerome flew his working-class parents over from New York via business class return, and expensive gifts were distributed on the big day itself.
With the fun and costly frivolities of the season now behind them, they’ve got some serious financial management to sort out: they don’t want to be saddled with hefty credit card totals as they prepare their mortgage application. What’s the best way of zapping those cards and getting them back to zero where they should be?
Initially, they considered approaching a bank for a short-term loan but were put off for two main reasons: the bank was less than enthusiastic in helping them out, and they didn’t particularly want to leave a credit search “footprint” behind so close to a mortgage application.
Sarah hit upon an idea: they already had the money they needed to clear their credit card debts. It’s just that it was tied up in a valuable possession: Sarah, whose family originated in France, owned a magnificent French Napoleon III boulle marquetry bookcase (a “bibliotheque” in her native tongue). This dazzlingly beautiful piece, a family heirloom, dated from the 19th century (1860 to be precise), and featured two full-length glazed doors adorned with stunning gilt-bronze mounted marquetry, brass stringing and fine-quality egg and dart moulding. Sarah had this year had it valued at £75,000.
Sarah was expecting a generous bonus in the New Year, and she and Jerome felt sure that, if they were to place it under the control of a high-end specialist pawnbroker, they’d be able to raise the money to buy it back within six months. Unfortunately, they were saddled with an excruciatingly high APR by taking this option – no less than 155.8%!
Had they done a little more research on secured asset loans, they might well have found a far better deal: peer-to-peer lender Unbolted specialises in secured asset loans for individuals and SMEs. Its interest rates are vastly superior to pawnbrokers. Unbolted’s representative APR is just 44% – not far off four times lower than the pawnbroker Jerome and Sarah chose.
Borrowing from Unbolted would have saved them unnecessary expense in repayment. Not only can Unbolted’s customers settle early without penalty, but they’ll also be spared the intrusive credit searches that Jerome and Sarah were rightly so wary about. That’s because Unbolted collateralises the borrower’s valuable possession (or “asset”) as security for the loan.
Our expert partners will assess its value on resale in a secondary market, usually within hours of the item arriving in our offices. We’ll hold it in optimal and highly secure storage until the loan matures (usually six months), whereupon we’ll return it to the borrower upon settlement. Failing that, we’ll sell it at auction, returning to the borrower any sums in excess of the amount agreed at the outset.
