There are several advantages to using jewellery as collateral for a pawn loan:
- Jewellery has a high value-to-weight ratio, making it easy to transport and store, which can be convenient for both the borrower and the pawnbroker.
- Jewellery is a tangible asset, meaning it can be easily appraised and valued, which can help to determine the amount of the loan.
- Jewellery, especially gold, has been a store of value for centuries, so it can be a good hedge against inflation.
- Pawning jewellery is a quick and easy way to obtain a short-term loan. The process is usually simple and straightforward, and the loan can be approved and disbursed within a matter of minutes.
- Pawn loans are non-recourse, meaning if the borrower does not repay the loan, the pawnbroker keeps the jewellery. This eliminates the risk for the lender and the borrower can get it back if they are able to repay.
Author: Barry Klein – Certified Gemmologist