Leveraging your valuable jewelry
The pawn loan industry is a significantly underutilized industry for financial loans. It is common for people to turn to banks and other financial institutions for financial loans given the large presence of banks, their strong marketing strategies and their persistent forcing of loan information on potential customers. The pawn loan industry is however a far simpler and quicker industry and offers real value for money on interest payments and the total cost of the debt that a person can take out when compared with banks and other financial institutions.
The pawn loan transaction allows for better interest rates and a simpler loan process through the use of the borrowers assets as collateral. This differs from the banking industry which most often provides unsecured loans (except when financing vehicles or buildings) which are inherently more risky than secured loans. As a result the interest rates they charge on loans is higher than those associated with collateralized loans. The dominance of the banking industry in unsecured loan transactions also means they are able to charge higher interest rates due to the limited competition towards their products. Pawn shop loans offer a very viable alternative and those people looking for loans, and are able to offer collateral, are strongly advised to way up the benefits and costs of pawn loans versus bank and financial industry loans.
Pawn loans are a very straightforward transaction whereby an asset or assets from the customer are used as collateral against a capital amount loaned to the customer by the pawn shop. One of the most common assets used as collateral is valuable jewelry and hence the term jewelry loan is often used to describe this type of transaction by a pawn shop. Pawn shops have undergone a reinvention of late to attract more reliable and discerning customers. The image reinvention has involved the type of products which they now specialize in dealing with as well as changes to the physical image of pawn shops from where they now locate their businesses through to the interior decoration look and feel, which is now more in line with what you would find in a bank and a jewelry store. This image change has widened their target economic demographic as well as increased the value of loans that they can offer.
The transaction offered in the case of a jewelry loan is simple and efficient. A customer seeking a jewelry loan will offer up a piece of jewelry as collateral for the capital amount to be loaned. The pawn shop will use in-house valuation experts to assess the jewelry for a market related valuation and will then offer a check to the value of the valued jewelry piece as a loan to the customer. The loans are typically short term loans with the customers having to pay the capital amount as well as the signed upon interest cost back within a period of between thirty and sixty days. The interest charged on the loan covers a number of responsibilities that the pawn shop is obligated to provide. The jewelry piece will have to be stored securely to mitigate chances of loss or theft and the piece or pieces will also have to be insured angst loss, theft and damage. The total interest will also cover a margin that the pawn shop requires to stay in business and offer its services to the public. The interest rate charged by a pawn shop is typically substantially lower than what would be offered by a bank for a number of reasons. The loan is of course secured through the collateralized jewelry piece or pieces meaning that the pawn shop faces lower consequential risks if the customer is unable to pay back the loan. As part of the jewelry loan agreement, the pawn shop will be able to sell the jewelry piece to recoup the capital costs if the customer is unable to pay back the loan amount. The loans are also shorter term loans compared with the loan products offered by banks. Banks offer loan repayment terms often with a minimum repayment period of twelve months or more. The longer the loan repayment term, the higher the total interest costs. This is predominantly done to maximize the earnings potential for banks rather than convenience for the customer. The business model for pawn shops is more interested in higher turnover rates of customers and repeat customers and thus focus on shorter term loans. Convenience for customers is thus built into the business model. Lastly, interest rate costs for a jewelry loan can be lower as pawn shops will typically have lower overhead costs than those of banks and other financial institutions and the savings can therefore be passed on to customers.
Many people have not used pawn shops for a jewelry loan because of the image created of pawn shops by mainstream media and their inclusion in the operations of unscrupulous characters featured in some television shows and movies. As mentioned before the image has undergone a reinvention and upgrade and people will be pleasantly surprised by their experiences in reputable pawn shops. Pawn shops and the loan transactions between a pawn shop and a customer are highly regulated by state and federal laws which, again, many people are unaware of. The state and federal laws firstly require all pawn shops to be licensed. Laws also stipulate the maximum interest rates that can be charged and provide customer protection in the obligation of the pawn shop to provide limited grace period times for loan repayment. Pawn shops are also regulated by the valuation processes which need to be followed and the amounts loaned with respect the market value of the asset or assets used as collateral.
Any doubtful or uncertain potential customers looking for a jewelry loan can thus rest assured that they are covered and protected by state and federal laws which pawn shops have to abide by. Customers, however, also have some responsibilities they need to abide by in order to maximize the time spent at a pawn shop and their understanding of the loan amounts that will be provided if the transaction closes. Key to the transaction meeting expectations is understanding by the customer of the value of the jewelry piece or pieces that may be used as collateral. As pawn shops have reinvented their image, they have become very discerning over the brands and the quality of the metals or gemstones that they accept. They have also enhanced their skills and understanding of the market demands and volatility that drive the value of jewelry pieces and the associated gold, diamonds and other metals and stones found in jewelry. Customers looking for a jewelry loan should thus have an understanding of the brands of jewelry that are accepted by pawn shops as well as an understanding of the gold or other metal quality and the quality and clarity of diamonds and other stones found as part of the jewelry piece or pieces. By doing this, customers will have a far quicker and easier experience in the pawn shop and are more likely to have expectations met.
Once the jewelry piece or pieces have been valued and the customer has accepted the value and wants to continue with a jewelry loan transaction, an agreement will be signed which stipulates the interest rate, the repayment term length and the repayment schedule. Include in the agreement will be the responsibilities of the pawn shop to keep the jewelry safe and secure and their responsibilities and liabilities to the customer in the case of loss, theft or damage. Once the agreement has been signed by both parties, the jewelry is handed over by the customer and a check handed to the customer for the value of the jewelry. The process can be that simple and quick and when considering the benefits of a jewelry loan versus bank and financial institution loans and the simplicity of the process, a jewelry loan can be one of the most advantageous loan products available to a customer.
If you are looking for a cost effective loan and have movable assets in the form of jewelry, then it is strongly recommended that you research the jewelry loan market. If you have purchased or been handed down jewelry of high quality gold and diamonds or other stones within the family, then you will no doubt have some understanding of the value of the jewelry or, at minimum understand that the jewelry is valuable. At this stage why don’t you pay a visit to your local pawn shop and investigate if the value of the jewelry can be leveraged for a more liquid form an asset, namely cash. This cash can then be used for whatever reason you feel but could be used to purchase high growth asset classes, property or to make stock investments to maximize the return on your leveraged jewelry. Or maybe you simply need the jewelry loan to take the family on holiday, upgrade your car or add value to your property.
Many people have been dissuaded from using pawn shops because of their, rather unfair, stereotyped image created by the media and entertainment industry. As with many shops and other retail outlets, pawn shops have also undergone a significant image change and adapted to the new needs and demands of consumers. Pawn shops these days can be hugely beneficial to potential customers offering a cost effective solution to buying cheaper second hand goods, selling their own second hand goods for cash in this difficult economic period or using their own second hand goods as security against a loan. Because of the lasting image that pawn shops had, stemming back over twenty years ago, most of the public have not made use of benefits of pawn shops. The image is largely outdated as well as an artificial image created by the media and entertainment industry. The majority of pawn shops, even twenty years ago, were not part of a criminal underworld, but were unfortunately linked to the stereotypical image of pawn shops trading mostly in stolen goods that suited the entertainment industry and their simplistic plots for criminals and bad guys.
Despite the negative stereotype of pawn shops, they offer a number of significant benefits to the consuming public. Pawn shops have steadfastly remained in business and have worked hard to alter the image that they face. They have upgraded the look and feel of their stores to more closely match the modernism of many retail outlets. They have brightened up their showrooms and furnished them with comfortable and modern displays and customer facing décor. Their in-store image is now more closely resembling of a jewelry store crossed with a customer-centric bank branch. They have also shifted their retail operations to a higher end of product from designer jewelry to fine art. As a result, pawn shops are now far more accessible and attractive to the general public and have become a viable and beneficial alternative to other retail and financial institution offerings.
One of the most popular services offered by pawn shops is pawns loans with a jewelry loan being one of the prevalent pawn loans offered. A pawn loan is a simple transaction that involves a customer seeking a loan, to hand over an item that they own as collateral against the capital amount loaned to the customer. A jewelry loan simply involves the handing over of a piece of jewelry or more than one piece of jewelry to the pawn shop in exchange for a financial loan. The loan is typical of any other loan in that the loan needs to be paid back and an interest amount will be charged on the loan that takes into account the value of the loan and the repayment terms agreed upon before the loan is issued. As jewelry is owned by many people and is an easily movable asset that can be effortlessly stored safely and securely, a jewelry loan is one of the most popular loans offered by Phoenix pawn shops.
Handing over your jewelry to a pawn shop in exchange for a loan may seem a little nerve racking to some people but it is important to bear in mind that pawn shops and their activities are heavily regulated by federal and state laws. They face the same scrutiny and oversight as all other retail outlets and financial institutions in order to ensure the safety of customer assets and the legitimacy of their loans and responsibilities as safe keepers of customer’s assets. An example of the strict scrutiny a pawn shop faces, state laws require that pawn shops keep an inventory of all products that move through their stores to ensure that no stolen goods are traded. Some states requires that the inventory lists are passed on to police forces on a regular basis for screening by the police. All this is done to protect the customer and to ensure that pawns shops are encouraged and regulated to protect their customer’s rights.
If you are considering a jewelry loan then it is important that you understand the process of taking out the loan with a pawn shop. The first step is to assess your jewelry assets for potential value. The pawn shop will do a thorough valuation of the jewelry piece or pieces but you will want to do your homework first so that you have a ballpark idea of what value of loan you can expect. Jewelry with precious metal and stone content will of course have higher value and jewelry designed by reputable jewelry manufacturers and creators will add even more value. If you feel you have jewelry of value that will match the loan amount that you need then the next step is simply a case of going down to your local pawn shop.
One domain that pawn shops pride themselves in is their expertise in assessment of second hand products and their accurate valuations of these products. When you give your jewelry piece or pieces to be valued you can expect a thorough and extensive valuation. Jewelry is relatively easy to value provided there is precious metal or stone content to the jewelry piece. As precious metals, and in particular gold, platinum and silver, are traded on a daily basis on commodities markets, the price per weight of the metal is easily determined and applied to jewelry. Legitimate jewelry with gold, platinum or silver content will have originally been bought with a certificate of authenticity and will clearly stipulate the precious metal content of that piece of jewelry. The jewelry itself will have also been stamped with its karat weight for easy reference. Converting the karat weight of the gold, platinum or silver is simply a conversion involving the weight of the jewelry itself and the karat weight to calculate the pure metal content of the jewelry piece. Based on the global daily value of the precious metal used in the jewelry piece, a value can then be obtained for the jewelry based on its pure metal content. Jewelry with stones, such as diamonds is a more complex valuation as stones need to be assessed for clarity, shape, weight and other factors before a valuation can be assigned. Again, pawn shops have extensive experience in this and will provide an accurate value to the diamond or other stone content.
Other factors will however also play in the ultimate value provided for the jewelry piece or pieces. The designer and manufacturer can play a major role in the valuation. Designers such as Tiffany & Co, Cartier or Bulgari have value automatic additional value attached to their designs and if these designs are rare or are of vintage age and in good condition, then their associated value can increase almost exponentially. Rarity and vintage nature are always good attributes to have and, if the piece of jewelry is in good condition, then collectors will have put substantial value to that particular piece of jewelry. Regular jewelry is not always in demand from collectors but the precious metal and stone market is always looking for jewelry that can be melted and subsequently used for other purposes.
If you are still happy with your jewelry being used as collateral for a loan and the value associated with your jewelry will cover the financial amount you require, then you can proceed with the jewelry loan. This process involves agreeing formally on the value of the jewelry and the associated capital amount you will receive. The pawn shop will add an interest payment to the loan amount and the repayment terms and length will be signed. The pawn shop will also provide you with proof that your jewelry is only temporarily kept by them and that the jewelry will be stored safely and securely and that, while in the pawn shops possession, the jewelry will be insured against damage, loss and theft. The terms of the loan and your right to receive back the jewelry will obviously be dependent on the fact that you pay back the full capital loan amount and associated interest within the time period agreed upon. Should you fail to do this then it is important to note that the pawn shop has the right to sell your jewelry in order to recoup the costs of the loan. Federal and state laws do provide an element of protection to this transaction and many states to provide for a grace period after the expiry of the loan in which the customer can pay back the loan and interest amounts. It is important though, that if you have taken out a jewelry loan, that you make every effort to pay back the loan within the specified time period.
Once all of these details have been signed upon and you have handed over your jewelry, you will be issued with a check for the capital loan amount that matches the value of your jewelry. You can simply walk out the pawn shop and cash the check and you will now have access to your financial loan to be used as you please.
A jewelry loan is an easy and quick process to obtain cash that you may need for other purposes without giving making the drastic decision of selling your jewelry permanently. With pawn shops and their services having improved dramatically over the last few years, you really have no excuse for not pawning your jewelry if you are ever in need of a loan.