You are short on cash, have a need for some funding, and your bank account balance is not looking too healthy. You may not have any cash, but what you do have is a beautiful diamond set in a piece of jewelry that is worth a considerable amount of money. You consider pawning your diamond piece and do a Google search to look at options. This is when you stumble across a listing for a diamond loan service. Diamond loans work a lot like pawn loans, but the primary difference is diamonds are the only thing the lender accepts as collateral in exchange for a loan. Are diamond loans a good idea? Here's what you should know.
A diamond loan service will likely give you more for your piece than a pawn shop.
Diamond loan services operate a lot like pawn shops, but the people who operate these lending services tend to be actual diamond brokers. Diamond brokers are considered the utmost professionals in the diamond business. They know a great deal about diamonds and what attributes make them valuable. Therefore, when they look at a diamond piece, their interest will be in the value of the stone itself, and not so much in the resale value of the whole jewelry piece.
Pawnbrokers look at diamond pieces and determine their value strictly on how well consumers would buy the item if it were for sale in their place of business. Unfortunately, this can mean you will get a far lower offer for a diamond jewelry piece at a pawn shop than what you would at a diamond loan service provider.
Diamond lenders may give you options that a pawnbroker will not.
When you take your diamond jewelry to a pawnbroker, they will likely offer you a small lump-sum loan that must be paid back rather quickly. Diamond loan services are far more flexible in nature, so you will probably get a few different options when it comes to the loan you need. You may be offered:
- The chance to sell your diamond piece the broker straight out instead of pawning it
- A sizable loan that can be paid back over the course of a few months instead of all at one time
- An initial loan amount that could potentially be increased later on with further transactions
Most people who choose to get loans for their diamond rings or jewelry walk away happier with the amount they receive and the terms of the loan. In general, these lenders are more equipped to be flexible in their service offerings.