Diamond Articles

Pawning Diamonds and Jewelry vs. Selling Diamonds and Jewelry

January 4, 2015 - Diamond Articles

When it comes to raising cash, people naturally turn to their assets to see what they can liquidate. Diamonds and jewelry are one of the most common of valuable goods used to generate funds but you do have a couple of options in terms of how you do it.

Depending on what you have, how much you need to raise, when you need the funds and whether you are happy to part with the items, you will make different choices. When considering whether to sell or pawn diamonds and jewelry, weigh up both options and see which is the right fit.

Pawning Diamonds and Jewelry

So, how does it work?

In a nutshell, pawnshops make collateral loans. They lend you money, you hand over your valuables. Increasingly popular during times of economic downturn, pawnbrokers have been used by millions to make ends meet. Lets take a deeper look at exactly how they work.

Customers bring in an item of value, which the pawnshop offers a loan on based on its estimated second hand value. Goods are then kept securely in the possession of the pawnshop and returned once the full loan and interest have been paid. Interest rates vary from state to state so it is important to check exactly what these fees are.


The obvious benefit of pawning diamonds and pawning jewelry is that you are not parting with them for good. Provided that you meet your payments on time you will only temporarily hand over your diamonds and or jewelry. It is a short-term solution designed to help you meet small financial commitments without having to sell your possessions.


Unless you have the funds available to repay the loan early, pawnbrokers may not be the right choice as it is an expensive way to borrow. With exorbitant interest rates and short loan times of as little as 30 days, roughly 40% of pawnshop customers find that they have to repeat the loan. This cycle can be financially draining as you are compounding the APR (annual percentage rate).

Example: you pawn an item of $2500 retail value and receive $1000 from the pawnbroker to be paid over a 12-month period. The total amount of money that you could pay the pawnbroker by the end of the year is approx $1,850. Fixed Interest rates can be as high as 120% and APRs as high as 400%, making this option far less financially viable than might be apparent and less attractive than potentially selling the item.

 Defaulting on a loan does of course mean losing your item, a large amount of customers do not reclaim their items. Given that you receive a fraction of the value of the goods in the form of a loan, defaulting on payments and parting with your items is not a financially smart move. There is an element of risk involved when pawning diamonds and jewelry, especially if you think you may not be able to meet your payments.

Even if you do meet all of your payments, the main difference between pawning diamonds and jewelry and selling diamonds and jewelry is that whereas selling generates cash, pawning only lends you money that you have to pay back with interest. And whilst selling gives you the entire cash value of an item, pawning diamonds and jewelry will only provide you with a fraction of its resell value.

You can sell your items to a pawnbroker but they are not diamond specialists. As such, they do not have the expertise and knowledge to offer the best prices. Diamond buyers alone can offer the best prices for your diamond.

Selling Diamonds and Jewelry 


Selling your items, provided that you sell to the right person or company, will give you the entire second hand value of the item to keep. This means that:

  • You receive more cash for your diamonds and jewelry
  • There is no debt involved
  • It is a quick and clean transaction that can be completed in as little as 24 hours
  • There are no loans involved or financial risk on your end



Naturally, once you sell your items they are no longer yours. So if you are not looking to permanently part with your goods, selling will not be the right fit for you. If you decide that you are comfortable with this then the next step is to consider how to sell diamonds and jewelry.

How and who should I sell my diamonds and jewelry to?

Once again, you have a few choices. But in terms of straightforward and quick solutions with competitive prices, online diamond buyers are always the best option. With access to international diamond prices, online buyers can offer higher prices than local diamond buyers.

When choosing an online diamond buyer, research is key. There are a variety of businesses that will offer to buy your diamonds and jewelry but not all companies are the same. Look for reviews from previous customers and always check that the company is BBB accredited. It should not cost you anything to receive a quote and you will want to ensure that it is a gemologist examining any diamond items. At WP Diamonds we strive to offer a professional and smooth process from beginning to end. With free valuations and quick online quotes, our GIA trained gemologists and jewelry experts are always on hand to make you a fair offer.

Ultimately it comes down to personal choice and circumstances, but whatever you choses it is important to weigh up your options. If you are ready to part with your items for good, selling diamonds and diamond jewelry is the more lucrative and straightforward of procedures.

Bio: Written by one of our diamond, designer jewelry or luxury watch experts. With over 150 years of combined experience, our experts are able to comment on trends, share industry knowledge and provide diamond, designer jewelry and luxury watch education.

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