It seems nearly everyone has at least one piece of broken jewelry. Even though you don’t wear it, you also don’t want to throw it away. Perhaps you’ll finally get around to having it repaired one day. In the meantime though, did you know that it may be possible to secure a pawn loan using the broken jewelry as collateral? Of course all pawnshops have their own policies about buying or loaning on broken jewelry, but at Central Mega Pawn, we are often able to make pawn loans using broken jewelry as collateral.
Reasons Pawn Shops May Be Reluctant to Extend Loans for Broken Jewelry
Most pawn shops will accept jewelry as collateral for a pawn loan. However, if the jewelry is broken, your options may be a bit more limited. The reason? If you forfeit your item through defaulting on your loan, the only way the pawn shop can recover their loss is by selling the item. Believe it or not, most customers aren’t in the market for broken jewelry.
That means that the pawn shop can only sell the jewelry as scrap silver or gold or choose to have the item repaired. This is one reason that some pawn shops won’t accept broken chains, bracelets, earrings, watches, etc. So, the first factor that a pawn shop will consider is the value of the scrap metal. Keep in mind that pawn loans are based on a percentage of the value of an item.
For example, say you have a gold chain that you’d like to use as collateral for a pawn loan. It is a 14k gold chain that weighs 15 grams. Let’s also assume that the current spot price of gold per gram is $50. In this case, the chain may be estimated to be worth approximately $750.00. If the chain wasn’t broken, you may expect to be offered a loan ranging from 25% of the value, to 60% of the value. So it could be a loan of $187.50-$450.
However, keep in mind that the pawn shop reserves the right to reduce the offer of the loan because the chain is broken.
Getting Your First Pawn Loan: What to Know
If you’ve never pawned an item before, you should understand how the process works. First, you’ll show the pawnshop the item you’d like to use as collateral for a loan. They will inspect it and offer you a loan amount. You are well within your rights to try to negotiate for a bigger loan. If you do not get the amount you want, you’re welcome to take your jewelry elsewhere, with no hard feelings.
If you reach an agreement, you will need to sign your loan agreement. You will also need to provide your identification with a state-issued I.D., driver’s license, or passport. Different pawn shops offer different terms, but at our shop in Ontario, we only offer four-month loan terms. Interest rates range from 2.99%-35.99%. The pawnbroker will let you know exactly how much your monthly loan payment will be for the next four months. If you pay your pawn loan per the terms, your item will be returned to you when you make your final payment.
If you forget to make your loan payment, you will have a ten-day grace period to make your payment, or to at least make your interest payment. If you do not pay the interest or the payment within the 30 days, you risk forfeiting your item. The pawn shop is then free to sell your item.
Most reputable pawnshops will work with you to get you back on track. You may be able to renew your loan, extend your loan, or obtain a replacement loan. Nationwide it is estimated that only 15% of items that are used as collateral to secure a pawn loan are forfeited.
Unfortunately, because of confidentiality laws, pawnshops are unable to accept payment for your loan from third parties. You will need to make the payment yourself, as pawnshops cannot confirm that they have extended a loan to you to anyone but you.
While you are paying off your loan, your item will be safely stored, and monitored by 24/7 surveillance cameras. Jewelry, coins, silver, gold, and other high-value items are stored in a safe. The pawn shop should also have security gates protecting the business after hours.
You can have multiple pawn loans at one time. There is no limit to the number of items you may use as collateral for loans.
Should You Sell the Broken Jewelry?
If a pawn shop cannot extend a loan for your broken jewelry, you may still be able to sell them the item. You do need to make sure you’re ok with parting with the item. Once you sell it to the pawnshop, they can resell it as soon as they take possession of it. So, you need to be very sure you’re not going to regret selling it at a later date.
But, when you sell your item to a pawn shop, you’ll almost always put more cash in your pocket than the pawn loan will provide. That’s because the pawn shop will become the owner of the item. When you pawn your item, you retain ownership of the item.
Pawn Loans for Broken Jewelry in Ontario, Upland and Pomona
If you have broken jewelry and find yourself in a financial bind, bring the jewelry to Central Mega Pawn in Ontario. As the Inland Empire’s best reviewed pawn shop, we go above and beyond to put the money you need in your pocket. Central Mega Pawn buys, sells, and loans money seven days a week from our location on Central Avenue in Ontario. As a member in good standing of the California Pawnbrokers Association, Central Mega Pawn complies with all state and federal lending regulations.
We are always happy to answer questions. However, we do not provide loan estimates over the phone or email. For all other questions, call 909-627-9622, or feel free to email us.