What You Should Plan to Do When Borrowing Against Jewelry

Secured loans are usually the best way to get cash when you need it immediately because with the value of collateral protecting the lender if you default on the loan, they’re more willing to lend out cash. There are three main secured loans that people turn to which are home equity loans, auto equity loans and jewelry loans. Jewelry loans can be one of the best choices for secured loans because you don’t have to worry about losing your home or vehicle as you would with home or auto equity loans, and you could actually get a decent amount for it if you go to the right lender. But before you search for “pawn diamond ring” and go to the first pawn shop or lender that comes up, you should know how to get a jewelry loan the right way.

Know What Your Jewelry Is Truly Valued At

Some pawn shops and jewelry lenders try to appraise your jewelry at a value that’s below what it’s actually worth. That’s because they want to issue a loan that’s as minimal as possible so if you default they can sell it for a much higher price. If you take it to a certified professional appraiser as this Wikihow article suggests, you can get the actual value of your jewelry and come into the lender’s store with the upper hand knowing what a fair loan amount is. Some appraisers do charge a large fee for a full appraisal, but there are a few who can give free basic assessments that you should have done.

Know Your Negotiation Tactics

One thing you should not do when shopping for a jewelry loan is just accept the first offer that comes your way. Many pawn shops will offer about 50-66℅ of your jewelry’s resale value in their loans, but as this Bankrate article states it could be as low as 1/3 of its value. Lenders usually will not offer at the full value because if the item depreciates, they need to be covered for their losses. Sometimes there’s also laws capping the interest rates they can charge for loans at a certain amount. But you can still see if they want your jewelry bad enough by trying to work out a higher loan amount deal. If the lender is unwilling to make a better offer, be prepared to walk out. You can also ask a jewelry loan expert about what kind of loan terms are fair.

One thing to note in conclusion is when you’re looking to pawn diamond rings, you might be better served by a diamond loan service company because they will usually offer better loan amounts and have better repayment terms. These lenders usually have certain state laws they have to follow that pawn shops don’t and going with a certified jewelry lender ensures your jewelry will be securely stored away while you’re using the loan, and that you’ll be paying lower interest rates on a more long-term basis. You can get your cash quickly this way and without needing good credit.