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What are Pawn Loans and how do they work?

Published: 16 Aug 2017

Pawn loans are just one of the many financial services that we offer and they continue to be popular with both new and returning customers to H&T. Pawnbroking is considered the oldest form of borrowing, with evidence of its use in China dating back to over 3,000 years ago. It’s a simple idea, which works well and this is why it has stood the test of time.

What do I need to apply for a pawn loan?

To apply for a pawn loan today, you’ll need to be 18 years old or over and a UK resident. You’ll also need an item or items of value to put up as collateral for the loan. The money is lent to you against the value of your item(s) and the pawnbroker keeps your valuables in a safe place for the duration of the loan term. Once the loan has been paid back in full (including any agreed interest and fees), the item is returned to you.

Should you fail to pay the loan in full and on time, the pawnbroker then becomes the legal owner of the item(s) and can sell them to ensure they are not out of pocket. The valuable you use to borrow money against becomes the security for the loan itself. This is why you must be the legal owner of the item(s) and why you should be confident in your ability to repay the loan amount before signing on the dotted line.

The valuables you can use to put up for a pawn loan includes almost anything of value, such as:

  • Gold, silver or platinum items, including jewellery
  • Diamonds
  • Gemstone jewellery
  • Luxury and branded watches
  • Designer handbags
  • Art and antiques
  • Electronics
  • Mobile phones
  • Cars and other vehicles

If your item does not fit into any of the categories on this list, yet you can prove that it has value, we are happy to consider it. Give your local branch a call or pop in during opening hours. You can find your nearest H&T store by using our store locator. Alternatively, you’re welcome to enter the details and photographs into our online pawn loan system, where we can provide you with a quote.

What are the terms of a pawn loan?

Pawn loans at H&T last for up to six months and you are welcome to pay weekly, monthly or in one lump sum at the end of the term. If you’d like to pay off your item sooner, then this can be done at any time – we will not charge any fees for early or additional repayments and you may even be entitled to a rebate of interest if it is paid off much quicker than anticipated.

The interest that you are charged in addition to the loan amount is dependent on the value of the loan itself, which in turn depends on the value of your item(s). Our pawn loan interest rates are as follows:

Loan Amount Monthly Interest
£0 - £500 9.99%
£501 - £2,500 8.99%
£2,501 - £5,000 8.50%
£5,001 - £7,500 7.50%
£7,501 - £10,000 6.50%
£10,001 - £15,000 5.50%
£15,001 - £50,000 4.50%
£50,001 - £100,000 3.50%


Of course, there are some items which we may not be able to accept for a pawn loan. This includes some damaged items and personalised items, as this can affect the resale value. However, all items are considered and will be valued by our experts, whether you’re dealing with us in-store or online. If you are applying online, you’ll need to post your item(s) to us (we will provide pre-paid courier bags which are insured up to £30,000) for final valuation. If bringing your item(s) in-store, we should be able to give you a value and quote then and there.

Will you check my credit file?

No - we will not check your credit file or update it with any information as part of the pawn loan application. Pawn loans are known as secured loans, as the value of the loan is tied to a tangible object. Unsecured loans have no physical collateral and rely on your credit history.

As your credit file remains unaffected, you will still be able to take out a pawn loan if you have been turned down for a personal loan. This also means that your credit file remains unaffected by positive feedback as well, so if you want to boost your credit score then a pawn loan may not be what you’re looking for. However, if you’re simply looking for a quick and flexible way to unlock the value of your belongings during a time of need then a pawn loan could well be the right credit method for you.

What happens to my valuable item(s)?

Once you have either posted your item(s) to us or handed them over in-store and you are happy with our offer, a contract will be signed and the item(s) will be locked away in one of our safes. Our safes are highly secure and we always ensure the internal environment is just right to keep all items secure and undamaged. Your item(s) will sit here, completely untouched, until the loan has been paid and it is time to return it to you.

If you have dealt with us in-store, you’ll be able to collect your item(s) from the same shop you received the loan from. If you have dealt with us online, then we will post your item back to you using an insured courier service. We have been offering pawn loans for over 120 years, so you can rest assured that we know exactly how to keep your belongings as safe and secure as possible while they are in our possession.

If you fail to pay back the loan and we cannot come to any arrangement with you, then we will sell the item(s) to recoup our costs. Your item(s) may be sent to any of our stores, and will not necessarily be put up for sale in the store you dealt with originally.

How do I get started?

Bring any valuables you’d be happy to part with for 6 months to your local H&T store, or use our online pawn loan form to get a preliminary valuation from us. Whether you’re applying in-store or online, the process is simple and any questions you have can be answered by our friendly team. We look forward to seeing you in one of our stores or receiving your online application at any time.