About Pawn Shop Services

5 Things You Should Know About a Pawn Shop

Banks and bankers have been around for a long time, but one financial service has a continuous history that’s far longer – more than 3,000 years. Long before banks, the first pawn shop began operating in ancient China to grant credit to peasants.

Ancient Greeks and Romans needing quick cash visited their nearest pawn shop. Today, a pawn loan remains a quick and popular way to borrow needed cash. More than 30 million Americans are taking loans from pawn shops every year.

NYC Luxury Pawn Shop
NYC Luxury Pawn Shop

Let’s look at a top local pawn shop’s various services to its customers.

1. What Is a Pawn Shop?

A Pawn shop’s primary business is making short-term – one to four months – cash loans to consumers. These loans are possible because the pawnbroker holds pledged collateral as security against the loan’s value. For example, the collateral might be jewelry, collectibles, artwork, or other valuable items.

Because pawn shops specialize in short-term cash loans against collateral, the loans are at surprisingly low-interest rates. In addition, offering this type of deal is possible because the customer offers property they own as collateral.

Having the collateral in hand means less risk for the pawnbroker because if the borrower defaults, the pawnbroker can sell the collateral.

This collateral loan can be paid off at any time during the loan period, with the borrower taking back possession of the pledged item. According to national statistics, borrowers redeem their collateral at a better than 80% rate.

Because of their expertise in appraising valuable items, many pawn shops are active jewelry, collectible, and gold buyers and sellers and operate online shops selling various items.

Laws regulating your local pawn shop are in place at the city, state, and federal levels, thoroughly and transparently protecting consumers’ rights. Knowing that the authorities fully license your closest pawn shop adds a level of confidence to prospective borrowers.

In addition, licensed pawn shops operate under all of the major federal laws regulating financial services, including the USA Patriot Act and the Truth-in-Lending Act.

2. How Does a Pawn Loan Work?

Also called a collateral loan, a pawn loan starts with the customer taking their valuable collateral – say jewelry – to their local pawn shop. Then, appraising the item – which a certified and licensed pawnbroker does – takes just a few minutes.

A cash loan is made to the customer on the spot using the agreed-upon value of the pledged item as collateral.

Using an online pawn loan calculator is another way to get a quick appraisal for items. First, the customer uploads details about their collateral item, a few pictures, and the requested loan amount. Then, the pawnbroker responds with an estimated value and loan amount.

Unlike banks or pay-day loan companies, taking a collateral loan doesn’t require credit, income, or employment checks. In addition, unlike any other form of loan, failing to repay the loan does not affect the borrower’s credit rating.

Best of all, the entire process takes a few minutes – 15 is average – from start to finish. Compare that to a bank where loan application and processing takes days, if not weeks.

The borrower redeems their collateral by repaying the loan within the loan period of up to four months. If the borrower does not repay the loan, the pawnbroker has the right to sell the collateral at the end of the loan period.

3. Gold, Silver, Jewelry, and More

With their proven expertise in appraising valuables, certified pawnbrokers are uniquely qualified at valuations. As a result, customers interested in selling their jewelry or other valuables will get fair and realistic prices.

Experienced pawnbrokers will quickly evaluate your item and make an offer based on their knowledge of the item’s current market value.

Among the items your closest pawn shop is buying are:

  • Estate jewelry, diamonds, gold, silver, gemstones
  • Watches and timepieces
  • Artwork, collectibles, and memorabilia
  • Sporting goods and musical instruments

For customers, this means they have a ready source of cash if they are interested in selling valuables for any reason. For example, a pawn shop specializing in gold, silver, and jewelry will pay more than other buyers because they understand the market.

Because the payments are made immediately – in cash – it’s a quick and easy process for the customer.

These purchases add to the pawnbroker’s inventory of items they have for sale – either in their shop or online – so it’s a win-win situation for both parties.

4. Buying from a Pawn Shop

The same pricing expertise that pawnbrokers use when making loans or buying works to the buyer’s advantage when shopping at the pawn shop or on its website.

The selling prices of jewelry, collectibles, and more at pawn shops reflect real-world pricing – not pie-in-the-sky numbers. Because the prices are grounded in actual market value, buyers aren’t paying the inflated prices they might find for the same items at other retailers.

5. No Credit Required

Starting long before banks – or credit reporting agencies – even existed, pawnbrokers made daily loans to people. Collateral secured the loans, so there was no risk involved for the pawn broker. Moreover, pawnbrokers made the loans on the spot without filling out reams of paperwork.

That still applies today. Many people need a short-term, readily-available cash loan for an emergency or to provide a cushion between paychecks. And that means collateral loans are still an essential part of today’s financial landscape.

Having credit reports pulled and employment verified takes time. One of the most appealing benefits of collateral loans from a pawn shop is that none of that is required.

3,000 Years of Service

Today’s pawn shop is still operating on the same principles that pawnbrokers in ancient Greece and Rome worked on. And it’s still a straightforward transaction. When you find yourself needing a cash loan, the pawnbroker will loan you money in return for providing collateral as security.


A few things have changed. Borrowers today are protected by city, state, and federal regulations that didn’t exist until fairly recently. Today’s pawn shop also buys and sells many more items than ever before.

So the next time you need a fast, short-term cash loan, or you are interested in selling a few valuables, contact us today for an online jewelry appraisal!

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