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Pawn Loans: What Are the Benefits?

Published: 12 Nov 2018

The typical high street pawn shop has evolved greatly over the last few hundred years, and is today more accessible and professional than ever before. As a result, many people are only just discovering pawn loans as a sensible method of short term, flexible borrowing. Unfortunately, pawnbrokers have traditionally been portrayed rather negatively in literature and film, but this is slowly changing. If you’re new to pawn loans and want to know how they could work for you, check out our list of benefits below:

No credit check

Unlike other methods of convenient, shorter term borrowing - such as credit cards or personal loans - pawn loans require no credit check at all. This is because the security for the loan lies not in your financial history but in the value of the item you have put up for collateral. A typical high street pawnbroker, such as H&T, will accept almost any item of value, such as gold jewellery, diamonds, luxury watches, antiques, collectables and art.

Of course, just because a credit check is not carried out as part of the loan application, this does not mean other protections are in place. You will be asked for I.D and you will need to demonstrate the loan is affordable for you.

Easy to access

Pawn loans are incredibly easy to access, and contrary to what you might think, you won’t have to go to a dingy old shop in a cobbled alleyway. You can find large, bright and welcoming H&T stores in city and town centres all over the UK, as well as within shopping centres nationwide. We have over 190 locations – to find your nearest branch, click here. We are happy to see you at any time and can process your loan for you on the spot, or simply chat to you about what we can offer, with no pressure or obligation for you to proceed.

If you’d rather apply for your pawn loan from home, you can do this with our online service. This can help you to beat the queues if your local store is a busy one, and you’ll only need to stop by briefly to collect your cash.

Quick turnaround

Pawn loans are a fast and efficient way of borrowing a bit of extra cash when you really need it, and the application process is relatively short. As long as you bring I.D and a proof of address with you, we can process your loan within the hour (during non-busy periods). This is really useful when you require cash in an emergency – if you need urgent car repairs or you need to travel to see a sick family member, for example. Your item will be valued by our in-house experts and you’ll be offered a loan amount. You’ll always get to see the full terms of the loan and can ask us any questions at any point in the process if you need clarification. You’ll need to answer some questions, then once the application has been completed we’ll pay you cash in hand.

Shorter loan terms

A pawn loan has a typical term of 6 months. Once this time period is up, the loan must be paid in full plus interest. When it comes to borrowing money, many people prefer to have paid off individual debts within a relatively short time-frame. Of course, you may be in a position to pay off your pawn loan earlier than this and can therefore get your item back sooner. This is entirely possible and may even save you money on your loan compared to paying it off at the 6 month limit.

With a time-frame of 6 months to arrange full and final payment, pawn loans are favoured by many over other types of short term lending, such as payday loans. Loans which require payment within just a month can leave you playing catch up for a very long time, and are the cause of so called ‘debt spirals’. With a 6 month limit within which to make full payment, pawn loans are much easier to manage without becoming a burden year in, year out.

Affordable and flexible repayments

The repayment amount for your loan (that’s the amount borrowed plus interest) will be made clear to you before you sign on the dotted line, and we will not lend to you if your finances mean you will struggle to meet the repayments. You must be confident that you can honour the terms of the loan, as failure to repay in-full and on time may mean you lose ownership of your valuable item.

You don’t have to save up your money and settle your loan in one payment at the 6 month deadline, although this is a perfectly fine payment method. If you want to, you can pay off your loan in instalments of your choosing, or make a couple of lump sum payments over the 6 month period. As mentioned above, you can also opt to pay in full at any point to complete the loan, meaning you don’t necessarily have to wait 6 months to get your item back.

Unlock the value of your belongings

Many of us have the odd piece of jewellery or a nice watch we keep for special occasions, which sit in a drawer or box for most of the year. You may have antiques or collectables sitting in the attic, or a piece of art which is collecting dust in a spare room. When you need money to pay for an unexpected bill or emergency cost of some kind, why not unlock the value in items like these? As long as they hold value and are authentic, your rarely used – but still very much wanted – belongings can be put to work.

Of course, if you want to sell any items outright, our purchasing team would be happy to make you an offer. 

Protected and fully regulated

Another fantastic benefit of pawn loans is that all reputable pawnbrokers operating in the UK are now required to follow strict guidelines from the Financial Conduct Authority. This ensures that customers are treated fairly at all points, and requires a high level of professionalism.

UK lending laws and strict regulations protect you, the borrower, but what about your valuable item(s)? You’ll be pleased to know any item you put up for a pawn loan will be stored for the duration of the loan term within a highly secure, temperature regulated safe. You can also rest assured that all pieces, whether small items of jewellery or large works of art, will be fully protected and treated with respect and care at all times.

Any questions about H&T’s pawn loans? Call our friendly and knowledgeable team for free on 0800 121 4121.