As with most financial questions, this is a very personal decision. If I simply take all emotion out of the question, it’s easy. Generally, you should sell your jewelry outright instead of pawning it in order to get the most money for it. So, if it’s just an issue of money, sell it. On the other hand, why would you pawn it? Would you pawn it to have some cash but hold onto the jewelry in case the price of gold gets higher? That sounds silly but people make stranger financial decisions.
The reason someone might pawn jewelry is simple. They need money but they don’t want to lose the items. Pawn shops offer significantly lower money when you’re pawning because they need to factor in the potential for you not repaying the loan. In that case, they need to resell the item at a profit that includes how they’ve had to hold onto your item without selling it because of the loan term. So, you pawn an item because you want to keep it and you just need quick cash.
In my mind, if you want to keep your jewelry, you should try not to pawn it either. Of course, it’s easy for me to say. I’m not the one with the jewelry. My financial situation is my own, just like yours is your own. So, I might have my own ideas about loans and selling but what’s important is you, not me. Selling outright almost always gives you more money. I can’t think of when it wouldn’t, in fact.
When you pawn jewelry, you risk losing it if you cannot repay the loan within the specified timeframe. It gives you immediate cash but what if you end up losing the jewelry? In that case, 20/20 hindsight is going to tell you that you should have gotten your money out at the start.
So, here’s the takeaway.
If you need immediate cash and are okay with no longer owning the jewelry, selling outright is probably the best option. If you only need money for a short period of time and know you can repay the loan quickly, pawning is a good alternative if you don’t want to lose the items.
If you want a good baseline for your decision, why not bring your jewelry to me? At our La Jolla showroom, one of our GIA Accredited Jewelry Professionals will be glad to give you a free verbal appraisal of the jewelry’s value. That will help you make the right decision. So, get in touch when you’re thinking about pawning or selling jewelry in San Diego. You’ll be glad you did.
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