Pawnshop or Online Loan – What to Choose?

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We can find different methods to get extra financing nowadays. People in complicated life conditions look for specific facilities to get money, covering their essential needs. Therefore, when choosing a suitable establishment, they consider various factors, such as conditions for taking out financial lending, maximum sum, and ability to return finances. Filipino apply for credit services or use pawnshops to get additional money. What is the difference between these financial establishments in the Philippines, and which is the best to choose nowadays? 

Peculiarities of the Pawnshop in the Philippines

A pawnshop is a place where the money can be received after the provision of the deposit. People mainly come there if the necessity to get finances quickly appears.

Overall, the main functions of this specific facility are the following:  

  • to put a thing as a pledge: people bring something which has value, and put it as a deposit for the price set by the pawnshop. The moneylender provides the free evaluation of the thing and tells the price to the borrower (the cost is usually lower than the actual price in the shop). If the value suits the customer, he may leave the item with the percentage installment and get the money. 
  • to sell used items: people can sell their old things in the pawnshop. Regardless of the low price installed for the used thing, people merchandise them because of the availability to sell practically everything. 
  • to buy used or new items: pawnshops hold unredeemed items for some time and sell them if the time is over. They usually set the price higher than the primary one when pawning. The list of the available items to buy consists of both old and new things.

The pawning process is legal and contains different terms depending on each pawnshop’s rules. The main advantage is that the deal is provided quickly, and the borrower can instantly receive the money. 

What Can You Pledge? 

The things, which you can leave as a pledge in the pawnshop, are different.

The most regular are the following:

  • Devices: mobile phones, tablets, headphones, etc. 
  • Clothes: new and old things from the wardrobe. 
  • Jewelry: rings, earrings, bracelets, necklaces.
  • Musical instruments: guitars, violins, drum systems, etc.

The type of pledge determines its price and the interest rate set by the pawnbroker. 

How does the Pawnshop Work? 

The primary representative of the pawnshop is the pawnbroker, a person who knows all the conditions, evaluates the items, and sets the price due to objective value.

The process of pawning consists of several steps: 

  1. People bring the thing as a deposit for money lending. 
  2. The official representative evaluates it and gives the money for its objective cost. 
  3. Until the end of repayment time, the borrower needs to bring the money back, add finances due to the percentage rate, and get his thing back. 
  4. If the money for the pledge wasn’t returned, the pawnbroker can leave the thing in the pawnshop and sell it to somebody else for a higher price. 

Here you can see the example of the pawnshop activities.

For instance, we give the mobile phone as a pledge with the following conditions: 

  • We receive 3,000 PHP with a 2% interest rate and a 20% fee for the finances. 
  • We have 1 month to return the money to get the mobile phone, and there are 2 ways we can follow:
    • pay 660 PHP (2% installment + 20% fee) to prolong the repayment time for 1 month more;
    • pay 3,660 PHP to get the item back without expanding the terms to give the money back. 
  • We can do nothing, and if the money wasn’t returned for the set period, the pawnshop would sell the mobile phone. 

However, the pawnshops have different conditions for making the repayment. For instance, if the installment and fee are given to prolong the terms, the pawnbroker may double the interest rate. 

Positive and Negative Features of the Pawnshop in the Philippines

Several objective profitable factors make people use the services to get extra money.

They are the following:

  • Getting money instantly: you receive the funds right after evaluating the thing and confirming the agreements with the repayment conditions. 
  • Unlimited loan amount: many pawnshops take deposits of different values, allowing the customers to choose the items to pledge. 
  • Minimum documents: you shouldn’t prepare many necessary documents to make a deal in the pawnshop. 
  • Accessibility: the pawnshops can be found practically in each city in the Philippines, which makes them available to the citizens. 
  • Simple repayment: giving money back is also convenient, similarly to leaving the deposit. 

However, several issues can make people think about choosing other places to get additional finances.

Here you can find some disadvantages of the pawnshops: 

  • High percentage installments: the pawnshops provide higher monthly interest rates for the items than online credit establishments or bank services. 
  • Risk to lose the valuable item: if the money for the deposit isn’t given back in time, the pawnbroker can sell it. 
  • Low price of the pledge: as a rule, the price of the thing you leave as a deposit is lower than its regular cost. 
  • Limited repayment time: the pawnshops usually set a short time to redeem the pledge, which is typically hard to follow. 

As we see, the peculiarities of the pawnshop contain both positive and negative factors, which should be considered before giving a pledge to the pawnbroker. 

Which Pawnshop to Choose in the Philippines?

There are many establishments in each city, which may become suitable for the citizens.

The most prominent of them are the following: 

  • RD Pawnshop: it requires regular ID documents and a pledge to receive a loan. The repayment time is up to 4 months with 3% monthly installment. The bills payment and loading services are also available there. 
  • N-CASH: the pawnshop gives money lending for up to 4 months with a 4-5% interest rate. It also has a website, where you can learn everything about the conditions.
  • Tambunting: you can get money for up to 6 months with a 4% interest rate. Pawning and remittance are the standard services offered by the pawnshop. 
  • Villarica: you can receive money lending for 4 months with 4-6% of the monthly installment. The pawnshop also provides auctioning and money exchange for the clients. 

If you decide to leave a thing as a deposit, you can choose the facility with the most suitable conditions. 

Online Loans and Their Peculiarities 

It is one more helpful method to get additional money, which Filipinos regularly use.

It differs from the pawnshop’s services by the following properties: 

  • You need to provide a more extensive documentary package to the loan facility, while the pawnshops usually need only your ID. 
  • The pledge is optional for online money lendings (for instance, car and real estate loans necessarily need leaving a deposit).
  • Citizens, who are unemployed, can’t use online financing but can get money from the pawnshop. 
  • The amount of loan is unlimited in the pawnshop when the online services give a specific amount of finances.
  • The finances can be instantly received in the pawnshop, but you will wait for several days to get credit from the online facility. 
  • The pawnshop works only in person when the online loans can be received without physical contact with the company’s representatives. 

The procedure of borrowing money online is also simple and requires the following steps: 

  1. Choose the necessary loan amount at the company’s website. 
  2. Fill in the application form, indicating the personal information.
  3. Upload the photos of documents, confirming your identity.
  4. Wait for the operator’s call. 
  5. Get the money on your banking card in 1-2 days. 

You can choose the specific loan type for your requirements, and you’ll get the interest rate and the repayment period depending on the conditions of the company. 

Where To Get Money Lending in the Philippines? 

The most regular establishments used by the citizens are the following: 

  1. Digido: you can get up to 25,000 PHP within 30 days of the repayment period, and the interest rate will depend on the amount of borrowed money. 
  2. Robocash: it has one of the lowest percentage installments among other financial establishments in the Philippines: get a maximum of 10,000 PHP with 0% per day. 
  3. MoneyCat: the company allows you to get up to 25,000 PHP for 180 days to give the money back. 
  4. Unapay: the maximum repayment time is 180 days with 0.1% per day. You can borrow up to 50,000 PHP. 

You need to carefully learn about all the conditions of each establishment before applying for money lending. 


Overall, there are different methods to get additional finances in the Philippines, and the most popular are the pawnshop and online financing. Before choosing the suitable algorithm to get money, analyze your income and payability to avoid repayment problems. Applying for money lendings may help solve essential life issues, so you should get serious about this question.

User Review 4.5 (2 votes)
Linda Carters/ author of the article

Financial Journalist on Advance Loans Philippines with 8 years experience in a Fintech niche.

One Response

  1. Tim March 12, 2022

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