What to Know When Considering a Pawn Loan

When you take your valuables to a pawn shop they are assessed by a pawnbroker to determine the value of the item and the amount of cash you will be offered for your pawn loan. Understanding a pawnbroker’s methods, the value of your item and how to negotiate can help you get top dollar for your pawn loan.

The first thing the pawnbroker will do is assess the current appraised market value of your item. This process will depend on what you bring in. Today’s pawnbrokers have access to great technology as well as expert knowledge to assess everything from diamond jewelry to fine art.

Once market value has been determined the pawnbroker takes into consideration the condition of your item and resale value of your item. Remember that while you are taking out a loan and plan to return for your item, the pawnbroker needs to be able to resell and make a profit if you do not pay back your loan. They will be considering not just the condition and market value, but the demand for your item.

Rolex watches, for example, are in high demand. If you are taking out a pawn loan on a Rolex watch that’s in excellent condition, the amount of cash you can get will be much higher than if you are pawning something more obscure that won’t be easy to resell.

Finally, remember that a pawn shop is a business and profit margin has to be a part of the equation for the pawnbroker. Your pawn loan will be based on a percentage of the market value and the profit the pawnbroker hopes to make if they have to resell your item.