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- Pawn Brokers
Pawnbroking is an age-old custom. It even existed in the Ancient Greek and Roman Empires. In 1415 King Henry V pawned his jewels to raise money for a war with France!
How does Pawnbroking work? If you’re looking to pawn one of your possessions then you normally have two options:
1. Opt to sell the item to the pawnbroker.
2. Borrow cash from the pawnbroker for a set period, such as six months, with the item as security.
You can retrieve what you’ve pawned at any time by repaying the loan and the interest up to that point. If you can’t repay the loan then the pawnbroker keeps whatever possession you provided.
In every case it’s the pawnbroker who sets the price that you’ll get for the item you’ve pawned. You’ll then expect to pay 7% to 8% interest every month. How does a pawnbroker decide on an offer price or value? They will consider the resale value and the rarity value – wanted items are likely to be worth more. Typically for cash loans the pawnbroker will offer 50% to 60% of the item’s value.
What items is it possible to pawn? If you have something a pawnbroker can see some value in then you’ll get a price for it. Offered items have included gold false teeth, toupees & wigs, a herd of cattle, a swimming pool, and an urn of ashes! Different types of pawnbrokers have evolved for niche markets – there are even luxury pawnbrokers for big-ticket items. Jewellery is probably the most common item offered as security. Along with furniture, watches, designer handbags and even the odd car or work of art.
Why would you use a pawnbroker? They provide a simple solution when you lack cash – regardless of your wealth. You might have lots of expensive possessions but very little cash – so, pawning something solves the problem.
How to use a pawnbroker. Ensure the company is regulated by the FCA and a member of the National Pawnbrokers’ Association. Ensure you know the value of what you’re pawning if you want to get the best deal. Do your own research into supply and demand, wholesale and retail values and what similar items would sell for on an open market.
Need a small amount of cash and don’t want to pawn your goods? Then use our QuickStart tool
If you’re uncertain which type of credit might suit you or you have a money problem then one of guides may help you. We summarise each type of loan and their pros and cons, and address issues regarding debt and credit ratings.
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