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.

If you're thinking about applying for a pawn shop loan, you'll want to know exactly how they work. Here, we'll take you through all of the basics, and you can also get in touch if you have any questions or concerns.

Here's what we'll cover in this guide:

  • What is a pawn loan?
  • Advantages of pawn loans
  • How long is a pawn loan term?
  • Can you extend a pawn loan?
  • What is the interest on a pawn loan?
  • What do I need to apply for a pawn loan?
  • Will you check my credit file and do pawn loans affect credit?
  • What happens to my valuable item(s)?
  • How do I get started?


What is a pawn loan?

Before borrowing, you'll need to understand the definition of a pawn loan. If you take out a pawn loan, you'll be borrowing money that's secured against an item that you own. As a result, if you fail to meet the agreed repayments, the lender will be able to seize your item — also referred to as collateral — to recover their losses.

Here at H&T, we offer pawn shop loans and high-end pawn loans that you will be able to secure against a range of items, such as cars, jewellery, or watches. As long as you have items that could cover the cost, you can take out a secured loan of up to £1 million with us.

If you would like more information that will help you decide whether a pawnbroking loan is the right choice for you, check out our guide to the difference between secured and unsecured loans.


Advantages of pawn loans

There are some reasons why you might decide to opt for a pawn loan rather than an unsecured personal loan. Here are some of the advantages to going down this route:

  • Pawn loans have lower interest rates: Because secured loans give lenders an extra level of protection, as they can seize your items if you fail to repay your loan, the interest rates tend to be significantly lower than you'll find with unsecured loans.
  • They're easier to get: If you're wondering how a loan is obtained through a pawn shop, you'll be pleased to hear it's typically much easier than when you're trying to take out an unsecured loan. Because your collateral gives lenders some extra protection, they'll often be willing to lend to you, even if your credit score isn't the strongest. If this has been a hindrance for you in the past, a pawn loan could make the perfect solution.
  • You can borrow larger amounts: Thanks to the extra layer of protection, lenders will also typically allow you to borrow more than with an unsecured loan. However, you do need to remember that the items you secure your loan against must match or exceed the value, as these will be used to cover the cost if you can't make your repayments.


How long is a pawn loan term?

When you take out a pawn loan, you will agree the duration with your lender, and this can differ from company to company.

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. Loans can be paid off sooner, as we charge daily interest, you will only get charged interest for time you have the loan with us.

Can you extend a pawn loan?

If you find you're unable to pay back your pawn loan within the agreed repayment period, your lender may be willing to extend the term of your loan, although this will typically be considered on a case-by-case basis. If you are in this situation, contact your lender or store as soon as possible to ask about your options and come to an agreement that works for both of you.


What is the interest on a pawn loan?

The interest that you are charged in addition to the pawn loan amount is dependent on the value of the loan itself. Our pawn loan interest rates are as follows:

Loan amount Monthly interest Daily interest
£10 - £1,500 10.49% 0.34%
£1,501 - £3,500 9.49% 0.31%
£3,501 - £5,000 9.00% 0.30%
£5,001 - £7,500 8.00% 0.26%
£7,501 - £10,000 7.00% 0.23%
£10,001 - £15,000 6.00% 0.20%
£15,001 - £50,000 5.00% 0.16%
£50,000+ 4.00% 0.13%


Representative Example: Representative Example: Total amount of credit: £200 for 6 months. Total amount payable in one instalment: £325.88. Total charge for credit: £125.88(Interest Only). Interest rate 125.9% pa(fixed). Representative APR 165.5 %APR. Maximum payment term up to 6 months.

*Quote in 30 minutes if submitted between 9am - 5:30pm, Monday - Saturday

What do I need to apply for a pawn loan?

So, how is a loan obtained through a pawn shop or online pawnbroker? 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), 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. If you're worried you might not be able to make the repayments on time, contact your lender immediately to ask about an extension.

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.


What can I pawn?

If you're looking to secure a pawn loan against one or more items, you must be the legal owner of these items. The valuables you can use to put up for a pawn loan include 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
  • 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.

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 and do pawn loans affect credit?

No, we will not check your credit file or update it with any information as part of the pawn loan application. Because pawn loans are secured against items you own, which will be seized if you can't make the agreed repayments, your credit rating won't be checked or affected when you take out a secured loan, even if you're unable to repay it. Unsecured loans have no physical collateral and rely on your credit history.

Because you won't have to rely on your credit rating to take out a pawn loan, these can be a suitable option if you've been turned down for the likes of credit cards and personal loans in the past. However, it also means your rating won't be boosted if you do pay off your secured loan successfully. As a result, a pawn loan isn't going to be the best choice if your aim is to build up your credit score. But, if you’re simply looking for a quick and flexible way to unlock the value of your belongings during a time of need, 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 upon completing your repayments. 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?

If you're looking to take out a pawn loan with H&T, bring any valuables you would be happy to part with for up to six months to your local 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.

We hope we've been able to give you all of the information you need to decide whether a pawn loan is going to make the best borrowing option for you. But, if you're still unsure, get in touch with our knowledgeable and friendly team who will be more than happy to help!