10 Ways to Maximize Your Pawn Loans in the Philippines

If you need quick cash but don’t want to go through several documentation-related processes or have bad credit or no credit record at all, then getting a loan from a pawn shop might be your best—and perhaps only option. All you need is a valuable item that you can pawn, as this will serve as your collateral for the loan.

If you’re a first timer, you must understand how pawn loans work and how to make the most out of it. Here are some tips to help you out.

1. Do your due diligence

It’s always best to be prepared and know what to expect. Start by doing research and take the time to be familiar with the pawn shops available in your area. You need to make sure that you are dealing with a reputable one, preferably those with good reviews from other customers.

Research about your item and learn what its retail value is, as well as its secondhand value. This is important because the loan amount that the pawn shop will give you will be partially based on the item's total expected value.

2. Shop around

No two pawn shops are exactly the same, so it's best to shop around.

While there are pawn shops that accept a wide variety of items, only some specialize in certain items, such as jewelries or antiques.

3. Know the loan terms

Loan terms of pawn shops vary. Thus, make sure to take note of them so that you can compare.

The usual terms often include the principal amount, interest rates, maturity date, and liquidation damages in case of late payment and other transaction fees.

4. Pawn something of value

Pawn shops only accept high-quality items that can sell.

Commonly desirable items include jewelry, antiques, musical instruments, mobile phones, and laptops. You should avoid items that depreciate fast because it's highly unlikely that you'll get much out of it—if you do at all.

5. Bring something in good condition

The item will be more desirable if it’s in good condition.

The better its condition is, the higher are the chances that you can get more from it. Check if it works and look for missing pieces before you decide to pawn it.

6. Clean your item

It's always best to show the item in their best light.

Always think of how you would want an item to look like if you were going to purchase them. Clean it up by removing dust, dirt, or tarnishes. In case you’re pawning jewelry, make sure to polish it before pawning.

7. Prepare to prove your claims

It’s one thing to claim something, and another to prove it.

Bring something to help prove the value of your item such as its original packaging. In the case of jewelry, an appraisal from a professional will also help prove the item's worth.

8. Learn to negotiate

Just because your item is worth PHP 1,000 doesn't mean you’ll be getting that amount from the pawn shop.

Remember that pawn shops are resellers and that they must be able to get a profit from your item too. Learn to haggle to get the most out of your item, but understand that they will appraise the value of your item based on several different factors as well.

9. Know when to walk away

Just because a pawn shop made you an offer doesn't mean you have to accept it.

If you don't feel comfortable with the offer at all, thinking that you can do better, just walk away. This is a business transaction, and you, as the customer, should be happy with it.

10. Pay on time

Pay back the loan plus the interest and fees on time—and as agreed upon.

Your loan will be of more value to you if you minimize how long you pay interest on it. Extending the loan will carry additional charges.

Before you extend it, think of whether you expect to redeem the item at all. If not, it might be best to have the pawn shop take possession of the item already so that you no longer have to pay for unnecessary interest.

Getting a loan from a pawn shop is one of the easiest and most convenient ways to get some cash. Keep these simple tips in mind to get the best value out of your loan.

About the Author:
Carol Soriano is a consultant for, the very first online pawnshop in the Philippines. A writer at heart and a social media enthusiast, she finds personal finance, investment and money matters interesting topics to write about.

*Photo Credit: Thomas Hawk (Creative Commons)