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Pawnbroking is one of the oldest forms of banking. Pawnbrokers loans are a simple and increasingly important part of the finance industry.

In simple terms, you give an item of value (called a pledge) e.g. a watch to a pawnbroker and the pawnbroker will lend you money against it. It is simple and quick form of lending and borrowing.

You have 6 months to repay the pawnbroker and get your item (pledge) returned or you can extend the period of the loan.

Pawnbrokers loans are one of the few types of loans that bypass the borrowers status and almost solely concentrate on the item (pledge) offered as security.

The two main reasons these loans ignore most status checks are because:

  • there are no repayments. The pawnbrokers loan should be paid off within a 6 month term or the loan should be extended at that period (they are designed as short term loans)
  • and if you don't repay the loan the pawnbroker has the authority to sell your item and recoup the money lent / borrowed.

The average pawnbrokers loan in the past has normally been of a small size, a few hundred pounds, however this has been changing in the last few years. The average pawnbrokers loan is now about a thousand pounds with some specialist pawnbrokers lending 100's of thousands on anything from works of art to yachts.