HOW PAWN LOANS WORK

Pawn Master Ben Doing Some Pawn Math

I’ve been working in jewelry buying and jewelry pawn business for almost five years now and I’m frequently asked by clients how pawn loans work and what the terms of pawn loans are. This usually comes up when a customer has something very valuable like a Rolex watch or a diamond engagement ring and they need cash but for various reasons they don’t want to sell their jewelry. This is where pawn loans come in.

Pawn is sometimes referred to as usury or a pledge loan. Just like any other loan, you have a lender and a borrower. What makes a pawn loan unique is the pledge or the item that is being used as collateral, in our case we only loan on fine jewelry, diamonds, colored stones set in fine jewelry, engagement rings, sterling silver flatware, gold jewelry, platinum or luxury watches (such as Rolex, Cartier, Patek Philippe, basically items made of precious metals, diamonds and high end luxury watches. Instead of a borrower asking a lender for a certain amount and promising to pay the loan off, pawn brokers will use the pledged item’s (your engagement ring) value to determine the loan amount. Once an amount is determined and agreed upon the borrower walks away with instant cash and the lender or pawn broker holds on to the goods that were pledged. Having the loan amount backed or protected by a valuable item eliminates the risk of lending, which in turn opens doors for the customer or borrower.

Pawn Tools

Someone seeking a pawn loan only needs a thumbprint, signature, and a valid I.D. to qualify for a loan. No credit check, no proof of income, and no 30-day waiting period to see if you get approved. Pawn customers are also drawn to the idea of getting a loan without the downside of acquiring debt and having creditors harassing them about monthly payments. At Diamonds Forever the process can take as little as 10 minutes! Customers also feel relieved that their precious jewelry is kept safe inside our jewelry store. As far as the terms for a pawn loan go it all depends on where you’re getting the loan from. Here in California the state has set up a system of predetermined fees and interest rates. Once we figure how much a loan is going to be the state has a rate chart that assigns the legal interest rates and convenience fees. Convenience fees include ticket writing fees, storage fees, and lost ticket fees. Most states have a 4-month loan system that also includes a 10-day grace period where clients have the right to redeem their loans after the term is up and applicable fees are paid. At my shop, Diamonds Forever in San Diego, we work with our clients and will accept the minimum payment so our clients don’t lose their goods.

If you have a large diamond, fine jewelry or a luxury watch and you want to see how big of a Pawn Loan you can get, stop in our store today and get your free jewelry appraisal. Diamonds Forever is staffed with GIA (Gemological Institute of America) trained jewelry professionals, highly educated so you get the most for your precious jewelry.

Ben- Your friendly neighborhood gold buyer and lender

Diamonds Forever

3689 Midway Dr. Suite A

San Diego, CA 92110

619-223-2151

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