Is A Pawnshop Loan A Good Idea?

Pawn Shop loans have been a rising star as a place to conveniently and easily get a loan and in many instances, Pawn Shop loans are known to be a lot cheaper than payday or title loans when you are in need of cash quickly. 


For many people getting a bank loan is a last resort and not always an option, which is where a pawnshop loan can offer you a great alternative to get some instant cash.  There are plenty of opinions with pawnshop loans, and what they really mean for your finances, and we'll cover that in this article. 


In a nutshell, pawn shop loans, unlike other loans, involve the item you pawn (such as jewelry, powertools, high end electronics, watches and sporting goods - see full list here) being used as collateral for the loan. The difference that pawn loans offer is that you will receive the best cash value possible, whilst being able to get your item back at the end of the agreed term, and on payment of the initial amount plus the agreed-upon interest rate. 


Interest rates of pawnshop loans vary per state and are usually presented as fees. To make it simpler, payday loans and car title loans are typically 400% APR, while pawn shop loans are around 200% APR. It's a big difference. 

A pawn shop loan is a straightforward and convenient way to get a loan, as all you need to do is bring in the item that you wish to pawn, along with valid identification. The item you are offering as collateral will then be appraised to confirm what it is worth, before you are given a cash offer.


Once you have accepted an offer for the item and agreed to the terms of the loan, it is kept securely in our vaults until the agreed term length is completed.  You can return to the store to take the item back at any point during the loan period, and there is even an option to extend the loan period if needed.


The below contains more information about how pawn shop loans work and if they are a good idea. 


Do you have anything to pawn? Do you need quick cash? Visit one of our branches in New York City to get GEM Pawnbroker's efficient pawning experience. 

How pawn shop loans work

Before jumping into the pros and cons, we must first understand how pawn shops work. 


To be able to get a loan through a pawn shop, you will need to bring an item of value that you are willing to leave as collateral. Your items will then be appraised by a professional based on the item's condition and resale potential to determine how much you can ultimately get for the item.  Pawn Shops typically loan you 25% to 60% of the item's resale value. 


If the terms are up to your standards, you can walk away with the cash and a pawn ticket which is used to ‘buy’ your item back. 


Pawn Shop loans do not require credit checks, and you must be 18 or older in order to make a deal. 


Highly coveted items include accessories, designer items, vintage items, firearms, electronics, tools, and musical instruments. 


When you return within the contracted time, which generally lasts up to 2 months, you can get back your item by paying off the original appraisal value plus the loan fee and go home! You can also decide not to repay the loan, keep the money, and part ways with your item permanently.

What are the advantages of a pawnshop loan?

There are many advantages in getting a pawnshop loan:


  • You can access cash quickly, so it is ideal if you have an urgent need for money.
  • Pawn Shop loans are best for those that do not qualify for bank loans or conventional loans. 
  • They cost more than a traditional personal loan, but you can get the money faster without a credit check. 
  • You release the cash from your assets and not getting a loan against your house.
  • It doesn’t count as a debt against your name.
  • No credit checks – ever!
  • You get your items back as soon as the loan is repaid.
  • You can extend the loan period easily, so you don’t lose your item.
  • There is no legal requirement to get your item back, so if you really need the money, you can keep it without question. If you don’t repay, you’ll lose your item. 

Cons of going to a pawn shop for loans

The main con of pawnshop loans is that most do not get their items back - therefore letting go of their pieces forever. So when you go to a pawn shop, be sure that the item you're putting up as collateral is an item you can part ways with if it comes to that.

What do I pay to get the pawned item back?

The repayment is only made when you want the item back and it is made up of two figures – the original loan amount and the interest. Both amounts need to be paid to get the item back. Loan extensions can be offered, and this is where you pay the interest on the loan to extend the term.

How much could you get on a loan?

The loan amount will be based on the item being pawned, but we offer as much as $1,000,000 for valuable items. We accept a wide variety of items, including gold, silver, diamonds, fine watches, and automobiles.

Why choose GEM Pawn?

There are many reasons why you should choose us:


  1. Firstly, we have been trading in New York for over 70 years
  2. We have over 24 locations which make us convenient to visit
  3. We provide secure storage for your valuables during the loan period in our private vaults that are equipped with state-of-the-art security and alarms system
  4. We offer loans up to $1,000,000
  5. We offer fast and efficient services
  6. We accept a wide variety of items
  7. We can provide you with the highest value on your items
  8. We offer some of the lowest collateral loan rates in the United States
  9. We never do credit checks


Visit us today for more information about how you can get the best deals in New York City today!