American women are obsessed with luxury handbags. However, Asian buyers make the American obsession look more like a hobby. In Asia, having a designer bag from companies like Gucci and Louis Vuitton is a sign of social success. A new trend in Hong Kong is to pawn those expensive bags when strapped for cash.
Not only are luxury handbags expensive, they retain their value extremely well. Their value is what makes them desirable to pawn dealers. Anyone who needs a loan and has a real luxury handbag for collateral, can get considerable amounts of money. Many predict that the state of the global economy will cause this new trend to spread around the world.
The concept is quite simple. Those who are in need of quick cash and have a luxury bag they can put on loan can go to a pawn shop. If the handbag is a genuine Gucci, Chanel, Prada, Hermés, or Louis Vuitton, they can recover up to 80 percent of the value of the bag. Depending on the edition and rarity of the bag, customers could receive thousands of dollars on loan. One Hong Kong woman recently received a loan of $20,600 for her Hermés Birkin bag. The loans are typically made for four months, at 4 percent monthly interest.
The leader in Hong Kong for loaning money for handbags is Lady Finance. They say that almost all of their customers pay their loans back in full and get their bags back. If the loan is not paid on time, their bag is given to a partner company that specializes in selling used luxury bags. So next time you need some fast cash, take a luxury handbag down to the pawn shop and see what you can get for it!
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