Pawnbroking is a highly sensationalized, yet often misunderstood industry. Most of people’s common knowledge about jewelry pawn shops comes from popular reality-TV shows like Pawn Stars or Hardcore Pawn, which depict a sensationalized image of wacky customers, macho personalities, and intense haggling. While this makes for good television, the truth is that pawnbroking is usually pretty straightforward and most often is done by regular people in need of a simple, flexible, and confidential way to get cash to cover expenses without the process of going through banks.
So what exactly is a pawn loan? A pawn loan is a type of collateral loan, in which the lender keeps an item as security against the principal lent. The borrower agrees to pay back the principal and interest within the specified time period; otherwise the item becomes property of the pawnbroker. In the case that the borrower does not pay back the loan, the lender issues a notice to the borrower to pick up the item before the end of a grace period. The major advantage of a pawn loan as opposed to a bank loan is the speed and efficiency of the process, and that the collateral pledged is the borrower’s qualification. This means there is no credit check necessary or legal consequences in the event that the borrower defaults on the loan. Also, pawn loans give the customer the opportunity to recover their items pledged, as opposed to simply selling them.
A common misconception about pawn shops is that they’re out to take advantage of customers in a tight spot. Many people might be surprised to learn that the majority of items that are used as collateral for loans are recovered by the borrower. In fact, the National Pawnbroker’s Association (NPA) estimates that 80% of all pawn loans are recovered. In addition, repeat customers make up a large portion of a broker’s business, oftentimes with customers re-pawning the same item, which means that pawnbrokers have a strong interest in building and maintaining good relationships with their borrowers. Another misconception is that pawnbrokers charge whatever rates they want, this is not true as the interest rates on pawn loans in California are state regulated, meaning that all pawnbrokers will have the same interest rates, varying only in the amount of principal they may offer for an item.
Pawn Shops will lend money on a wide variety of tangible goods, from jewelry, coins and bouillon, firearms, electronics, musical instruments, antiques and collectables, to tools and equipment. Most Jewelry Pawn Shops will specialize in one or a few of these areas. Here at Oceanside Jewelers, we are a full service jewelry store as well as a jewelry pawn shop, specializing in fine jewelry, diamonds, coins and bouillon, and fine watches. Being that we are a retail jeweler and makers of fine jewelry, our knowledge and expertise allows us to make the best possible evaluation of your items, consistently offering top-dollar loans on jewelry items. We have a certified GIA Graduate gemologist on staff, along with owner and master jeweler Chad Elliott, who has decades of experience in the jewelry industry.