What to Know About Jewelry Pawn Loans

with Mitch Kushner of Empire Jewelers

Today, many people are looking for extra income, and one option that has surged in popularity over the last few years is the pawn loan.


So, how does a pawn loan work, and what should you know before you pawn your jewelry?

Here’s a Q&A with Mitch Kushner, third-generation jeweler and owner of Empire Pawn of Nassau in East Meadow, NY.

What is the main benefit of a pawn loan?

Mitch: Many people feel a sentimental attachment to a piece of jewelry. They may want to keep it as an investment or bequeath it to their children. A pawn loan is a quick and easy alternative to selling the item. You also don’t have to qualify for the loan or go through a credit check like you would with a traditional bank loan. The amount you receive is based on the appraised value of your piece — not your credit rating or other variable. It’s common knowledge that banks have tightened their lending standards over the last few years, so, for many, a pawn loan is a viable option to a traditional loan.

How does a pawn loan work?

Mitch: While terms and conditions between pawn shops may differ, a pawn loan generally works like this: when you bring in a piece of jewelry or other item to the pawn shop, the property is appraised by a professional appraiser. The appraiser then gives you a price for your item, the interest rate on the loan, and other terms and conditions of the loan.

In the case of coins and jewelry, the value is based on standardized industry factors, such as karat weight, rarity, and condition. The pawnbroker will then offer a fixed-rate loan based on the agreed-upon value, for a period of time, usually 30 days.

If you agree to the price and terms of the loan, you’ll receive cash in the amount of the agreed-upon loan; the item then becomes collateral against the loan. You’ll receive a pawn ticket with your name and address, a description of the pawned item, the loan amount, and the maturity date. The local police will also get a copy of the receipt. Pawn shops vary, but the length of most pawn loans is two or three months, along with a grace period. Once the loan, plus any interest, is paid back, you’ll receive your item back.

What about if I need an extension on the loan?

Mitch: Many pawn shops offer extension and/or renewal periods. With an extension, you may extend the length of your loan, as allowed by state law. Most pawn shops will require you to pay a portion of the interest owed.

Another option is a loan renewal. You pay the accrued interest on the loan, and a new loan is written. The original (principal) amount of the loan and the interest rate stay the same, but the due date of the loan is reset to the beginning.

If you don’t repay the loan within the time set forth in the terms (and don’t apply for an extension or renewal), the collateral then becomes the property of the pawn shop.

Should I do research before taking part in a pawn loan?

Mitch: Absolutely. Like the old TV commercial said, “an educated customer is our best customer.” Like any business, the reputation of pawn shops differs. Some are more professional and offer better loan prices than others.

Go online and find out as much as you can about the pawn shop or jewelry store you’re interested in. Is the shop reputable? Can you talk to or read testimonials from satisfied customers? Make sure the business is licensed and regulated by the state and/or local authorities. Also ask if the shop is insured and your item will be locked up and safe.

Before you get your item appraised, make sure the appraiser and the shop are associated with the National Pawnbrokers Association. It’s also important to understand how the appraiser determined the appraisal value, and the terms and conditions of the loan.

And keep in mind, the highest loan price doesn’t make the best deal. Do your research before buying, selling, or entering into any agreement with a pawn shop. An informed customer is a happy customer.

What sets Empire Pawn of Nassau apart from the rest of the pawnbrokers on Long Island?

Mitch: All of the above. We at Empire employ the highest standards in appraising, customer service and providing the best prices for our customers. In addition, you’ll never find any games, gimmicks or tricky tactics. Our clients return time and again because they get treated fairly and with courtesy.

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