South Koreans pawn shiny tech for stress-free loans

Cash-poor South Koreans are increasingly pawning their shiny new smartphones, fondleslabs and laptops for hassle-free loans at a growing number of specialist hock shops springing up in the Asian nation.

There are 15 of the new IT pawn shops in the Seoul area alone, all designed to cater to a younger, tech-savvy clientele, according to Korean news agency Yonhap.

A world away from the shady image of the classic pawn shop, usually manned by a chain-smoking octogenarian, this new breed of hocking shop reportedly features young staff, flashy, modern interiors and store web sites.

“One guy was telling his friend he was having a hard time finding someone who could lend him 200,000 won ($184),” pawn shop owner Kim Moo-hyun told the news agency.

“What was ironic is that he was holding the latest iPhone and iPad, which are obviously expensive. I thought this could become a business model.”

These shops typically pay 50-70 per cent of the device’s market price with interest at roughly three per cent, Yonhap said.

Loans apparently range from 200,000 won (£117) to 1 million won (£586) on average, with a Galaxy S3 in good nick potentially fetching 350,000 won (£205).

Customers can be in and out in ten minutes, after showing ID, signing a contract and handing over the device, in a set-up designed to service those in need of hassle-free, one-off loans.

Korean pawn shop owners have even tried to allay customers’ anxiety over being seen in their establishments by offering personal consulting services on mobile messaging platforms, Yonhap said.

But with new product release cycles shorter than ever, items will typically only be taken for a month or two. ®