Whether you have big plans on the horizon or an unexpected expense has popped up, you'll no doubt be on the lookout for a loan. However, it can sometimes be difficult to secure traditional forms of credit for a variety of reason. In cases like these, pawning one of your possessions may be the best option for you. Some people are wary of using pawnbrokers which we understand as there's still a lot of confusion around what a pawnbroker actually is in today’s age.The good news is that pawnbroking is nowhere near as complicated as many people first think In fact, it can be pretty easy to navigate once you get a more detailed understanding of how the process works. So, what is pawnbroking and how do pawn shops work? We've put together this easy-to-read guide to help you learn more about pawnbrokers' services. You'll learn all about what a pawnbroker is and how pawning works, and find out more about the advantages and disadvantages of pawnbroking, to help you decide whether taking out a pawnbroking loan is the best choice for you. Read on to find out more about the following topics: What is a pawnbroker? Should you get a pawnbroking loan? Preparing to take out a pawnbroking loan

What is a pawnbroker? 

A pawnbroker is simply a company which lends money based on the value of a customer’s item. After you’ve given them the item (the official term for this is pledged your item), the pawnbroker securely stores your item/s until you pay the loan back in full, plus interest. The good thing about pawning items is you can rest assured your items are in a safe secure place and can easily be returned once your payments are complete. Aside from these pawnbroking loans, many pawnbrokers offer a wider range of services. Here at H&T Pawnbrokers, we also buy gold in any condition, sell a beautiful range of jewellery, and give you fantastic rates on travel money*. Make sure to explore our website to find out more about the services we offer.

How does a pawnbroker work?

Secured loans are offered by pawnbrokers, mean you are lent money against your personal property (so that becomes your collateral. So, if you need to borrow money but can't get a traditional loan or credit card, a pawn shop can offer the perfect alternative.

The pawnbroking process starts by getting a valuation of your product. Here at H&T, you have the option to do it either online, in your nearest store or a visit from us in your home (please note, this is only available in certain areas) where you can get a quote within 30 minutes during business hours. Your item will be evaluated by one of our trained and certified teams, so you can rest assured valuation will be accurate and fair. It's a good idea to present your item well when it comes to valuation time, so consider giving it a quick clean so it looks its best — you can clean it yourself at home with dish soap and a microfibre cloth, watch our video on it! The valuation will be influenced by a lot of factors, including the condition, rarity, and popularity of the product. If you have any associated paperwork or official boxes, be sure to include these as they can often add value.

Once your pawned item has been valued and you have your loan offer, it's time to decide whether to take it or not. It's important to remember the loan offered won't be as high as the value of the item, as the pawnbroker needs to cover the storage charge, plus extra to compensate for the risk of defaulting on the loan. If you're able to, take some time to think about your offer before rushing in, especially for particularly valuable items. And make sure to read the pre-contractual information either in-store or online before you sign — it's important to know what you're getting into.

If you decide to go ahead with the loan and sign the contract, the next step is to decide on a repayment schedule. The loans at H&T last for six months, so it's important to make sure that you'll be able to pay this back within this timescale. Try to aim for as realistic a payment plan as possible, so you can feel confident that you'll easily repay your loan in full. At any time you can contact the team to discuss your repayment, especially if you’re having difficulty repaying for example — we’ll go into more detail on this later.

What can you pawn?

Every pawnbroker will have different assets they can accept when considering a loan request. consult with them beforehand to see if you have a suitable item for pawning The good news is many accept a wide range of valuable products for pawn loans, so you likely won't struggle too much to find a pawnbroker who accepts your item. We’re always happy to have a chat and make a cuppa, please feel comfortable to ask us anything you’re unsure about — there’s no silly questions and no obligation to proceed! Here at H&T, our pawn loans and high-end pawn loans can be secured against a wide variety of valuables, including, gold, cars, jewellery, antiques, and watches. Check out our list of the top items to pawn with H&T to find out which are the most commonly pawned products.

How does interest work? 

The amount of interest charged on a pawnbroking loan depends on the loan amount: the higher the amount, the less interest is charged on your products. The highest monthly interest rate is 9.99%, which is for loans between £1–£500, while the lowest is 3.5%, which is applied to loans between £50,000–£100,000.

Here at H&T, we charge daily interest rather than monthly. Daily interest is worked out by multiplying the monthly interest on your loan by 12 and dividing it by 365.25. For example, if you had a loan with the highest interest rate of 9.99%, this would be multiplied by 12 and divided by 365.25, which would equate to an interest of 0.33% per day.

We moved to daily interest as we believe it gives you more transparency on your loan. Our loan contracts are still 6 months long, and you are always welcome to pay off your loan earlier if you wish to do so. To find out more about how daily interest works, make sure to check out our daily interest FAQs.

Use the table below to find out exactly how much interest you'll be charged depending on the size of your loan.

Loan amount Monthly interest Daily interest
£0 - £500 9.99% 0.33%
£501 - £2,500 8.99% 0.30%
£2,501 - £5,000 8.50% 0.28%
£5,001 - £7,500 7.50% 0.28%
£7,501 - £10,000 6.50% 0.25%
£10,001 - £15,000 5.50% 0.18%
£15,001 - £50,000 4.50% 0.15%
£50,001 - £100,000 3.50% 0.11%
Representative Example: Total amount of credit: £200 for 6 months. Total amount payable in one instalment: £319.88.
Total charge for credit: £119.88(Interest Only). Interest rate 119.9% pa(fixed).
Maximum APR 155.8 %APR. Maximum payment term up to 6 months.

How do you pay off your loan?

When it comes to paying off your loan, want to do it in a number of small instalments. Some of our customers choose to pay little and often when they can, but if you’d rather stick to a budget with more structured payments, you can choose to pay at the same time each week or month. Alternatively, you can pay the loan off in full in one go if ou'd prefer.

If you're able to, you also have the option of paying your loan off before the 6 months is up. Some people prefer this option, as they don't have to pay as much interest. It's always important to make absolutely sure you're in the financial situation to do so before you take this plunge. But the good news is that pawnbroking is flexible, so many people are able to find that this service suits their needs perfectly.

Paying off your loan is quick and easy, and can be done either online or in one of our stores. If you ever have any queries or concerns about paying off your loan, you can easily contact us online, via telephone, or simply head to your local store.

Should you get a pawnbroking loan? 

Getting a pawnbroking loan, or taking out any type of loan, is something to carefully consider, so it's important to be sure about your decision. While they have numerous benefits, they may not be suitable for everyone, so make sure to think about your personal financial circumstances and do plenty of research before considering pawning your item. To help you make your decision, here are some pawnbroking advantages and disadvantages.

The advantages of pawnbroking loans

  • Ease of accessibility: Unlike other forms of credit, a pawn loan is based purely on the value of the item you've chosen to pawn. This means no matter your credit history or income, youll be able to pawn your item, which makes this type of loan much more accessible.

  • It takes very little time: Here at H&T, we can usually give you a quote for your item within 30 minutes during business hours. In most cases you'll be able to get the money you need on the day you apply.

  • You can borrow larger amounts if needed: Secured loans often allow you to borrow more money than unsecured loans. This is because the pawnbroker has an extra layer of protection, as they have your pawn as collateral. Here at H&T, we offer high-end pawn loans which allow you to borrow up to £1 million.

The disadvantages of pawnbroking loans

You need an asset to pawn: In order to secure a loan, you'll need an asset that has enough value for a pawnbroker to be able to lend money against. So, items made of less precious metals, like silver, would not be worth much compared to higher value precious metals, like gold, gemstones or diamonds. You also need to make sure the asset you have is valuable enough for the loan you need. Remember you won't be offered a loan equivalent to the full value of the item, as pawnbrokers need to account for costs like storage and security.

You may lose your item: In an unfortunate situation where you’re unable to make your repayments, the pawnbrokers may use the item to pay off your loan. Always discuss a repayment plan with your pawnbroker before committing to the loan and let them know if you’re struggling to make payments. Depending on the situation, there might be help available, which could minimise the risk of you losing your item.

You won't have access to the item until the loan is repaid: The pawnbroker will keep your item protected in their safe, and only return it to you once your loan has been repaid in full. Take this into account when it comes to pawning your item, and consider whether you can be apart from it for that long.

Pawn loans don't show on credit files: Pawnbroking can be used by lots of people as it doesn't take your credit history into account. Although this can be beneficial for some people, it isn’t helpful for those looking for a way to rebuild or improve credit scores.

What happens if you can't pay your pawnbroker back?

Unfortunately, your item will no longer be kept for you if you're unable to complete your loan payments within the allotted timeframe. When you take out a pawnbroker loan, its secured against your item as collateral. This means if youre unable to make the repayments, the pawnbrokers can use your item to cover the loan cost. It’s worth noting, once the loan has been settled, we return any excess funds to the customer. This is known as the surplus, which is the money left over after the sale of item, once the loan, interest fee, and selling costs have been taken into account. That's why it's vital to budget for the repayments before you take out a loan of any kind. You should also think about how you'd feel if you couldn't get your pawned item back, even if you're sure that won't be the case. Always be extremely cautious in offering any assets that hold sentimental value.

Preparing to take out a pawnbroking loan

Once you're completely sure a pawnbroking loan is right for you, it's time to start preparing to pawn your item. The good news is it's a pretty simple process, so you won't need to do too much beforehand. But before you pawn your possession, make sure to do the following in advance.

Be sure about the item you're choosing to pawn

It's important to be completely comfortable with the item you're choosing to pawn. Not only do you have to consider if the loan you get for the item will be enough for you, but you also need to think about how you'd feel if you weren't able to get the product back. It's always best to opt for pawning items you have little attachment to, even if you have a sentimental item which is more valuable. You should also make sure you can be without the item for 6 months on a practical level. For example, if you opt for a high-end pawn loan and choose to pawn your car, you need to consider how you will get around if it's the only vehicle you have. Make sure to think about all the implications of pawning your item, and plan for every eventuality.

Have a valid form of ID ready 

Any reputable pawnbroker will ask you for ID as verification before offering you a loan. If you go to a pawnbroker for a loan and they don't require ID, you should definitely pawn your item elsewhere to guarantee the safety of the product. Here at H&T, we’re members of the National Pawnbroker Association and we’re FCA regulated, just like the banks. Here at H&T, we accept a formal letter with your address that you've received within the last three months — for example, a utility bill or tenancy agreement — or you can show us a valid photographic ID like a passport or driving licence.

Get a handle on the lingo 

There are a number of terms used when discussing pawnbroking that you m not have heard before. To simplify the process, here a list of definitions of some of the most important words and terms to look out for:

  • Pledge: The pledge is the item you give to the pawnbrokers temporarily in exchange for your loan. Pawning: Pawning an item is simply the act of giving your pawn to a pawnbroker in exchange for a loan. Pay down: A pay down reduces the amount of interest you have to pay by paying a little extra every time you make your weekly or monthly payment. To find out more, check out our daily interest FAQ page.
  • LTV: LTV, or loan to value, is the percentage of the value of your product that the pawnbroker is willing to give you as a loan. As you already know, you won't get the full value of the item in the form of a loan, but you will likely get a significant portion of the value.
  • Secured loan: A secured loan is simply a loan that is secured against your own item (your pawn).
  • High-end pawn loan: This type of loan allows you to borrow up to £1 million, whereas our everyday loans have a maximum of £50,000.
  • NPA: The NPA, or the National Pawnbrokers Association, are a trade organisation for the pawnbroking industry. They work in the public interest to ensure that pawnbrokers are efficiently regulated.
  • FCA: The FCA, or the Financial Conduct Authority, issue Consumer Credit Licenses to all UK pawnbrokers. If your chosen pawnbroker doesn't have the licence from the FCA, you should avoid them and report them to the FCA immediately.

Here at H&T, we understand pawnbroking lingo can sometimes seem like another language. So we try to communicate as clearly as possible with all of our customers to make the process seem less daunting. If you're ever confused about what a certain term means, or what's happening with your pawned item or loan, make sure to get in touch with our helpful and friendly team who’ll take you through the process step by step.

After reading this guide, you should have a better understanding of what pawning means and how pawnbrokers work. Pawnbroker loans are a credible alternative to mainstream ways of borrowing if your credit score isn’t the strongest or you need money fast.

Always do your research before deciding to pawn an item. If you're ever in doubt or you want some advice, make sure to contact our friendly and helpful staff today. And if you think pawning an item might be the best solution for you, apply online to take out a secured loan with us today. To find out more about pawnbroking, make sure to check out our knowledge centre.

We offer a wide range of other services too. If you're interested in buying some beautiful pre-owned jewellery, or taking out some travel money for your next trip away, we've got exactly what you need.


Pawnbroking Loans are secured on your items, if the loan is not repaid it will be sold to pay the debt.

*Please note that Cheque Cashing, FX, retail purchases and sales are not regulated by the FCA.