The pawnbroker will value an item – typically gold or jewellery, though some offer loans against electronic goods or collectibles.
Most loans are less than a few hundred pounds and many pawn shops have a minimum loan value.
They will make an offer worth in the region of 50% of the resale value to cover their costs and the chance of the loan not being repaid.
Loans last a minimum of six months, but you can repay in full at any time.
If you fail to pay off the loan, a pawn shop will sell your item to cover their costs, but you will be entitled to any profits they make from the sale if the item is worth more than £75.
Pawn Shops Online
Thanks to online pawn services you can now get a loan secured against your valuables from the comfort of your own home in a matter of hours. Centralised services also mean more accurate valuations and more competitive rates.
At Borro our personal asset loans are simple to arrange, can be processed in as little as 24 hours and can be secured against a far greater range of valuables than would be possible for local services.
How can I get the best deal?
Shop around – though you're probably in a hurry, it does not mean you should accept a bad deal.
Different pawnbrokers may have different levels of expertise when it comes to valuing your goods and may over- or underestimate the value of the loan they offer you.
Go online – You may be able to get valuations online, over the phone or by sending off your item. For example. borro offers loans against items valued at £1000 or more.
Also check auction sites or other retailers to get a better understanding of the value of your goods before taking them to a pawn shop.
More on Pawnbroking
For more information on the pawnbroking industry you can consult the National Pawnbrokers Association's website, which offers a series of reports on the industry past and present. The independent Money Advice Service have a great article on how pawning works and your consumer rights.
If you're interested in the valuation methods used to determine the value of items like jewellery and gold, we have a section dedicated to explaining the process of appraising an item.