Pawn Vs. Loan
Borrowing money against your Rolex, diamond, or fine jewelry from Diamond Banc is a much smarter option than a traditional pawn loan. Getting a loan against your jewelry from Diamond Banc is generally also a much more cost-effective option than pawning your jewelry in the traditional sense. Diamond Banc provides loans to customers all over the country. We can have you funded in as little as 24 hours and our process is simple, fast, and secure. Diamond Banc is the number one online jewelry pawnbroker – in today’s digital world, you can consider us the best jewelry pawn lender near you. Diamond Banc prides itself on having the best jewelry loan program in the nation.
Our Jewelry Equity Loans offer customers unmatched value and flexibility. Clients simply pledge their jewelry as collateral and the jewelry is kept safely locked away in our secure vaults. Once the loan has been repaid, the items are immediately returned.
Diamond Banc Equity Loans
Traditional Jewelry Pawn Loans
Industry experts offering an ultra-high loan to value ratio
Conservative loan amounts
Additional loan principal payments encouraged
Stringent repayment structure, discouraging principal payments
We want our clients to redeem their collateral
Hope loans are not redeemed and added to inventory
Clients can draw loan balance up and down and can have access to their jewelry via collateral exchange during the loan period
Rigid loan structure, benefitting the lender, not the borrower
Customizable and automatic loan repayment terms encouraged
Antiquated loan servicing
Low rate guaranteed
High interest and loan fees
Why Choose Diamond Banc Over A Traditional Pawn Shop?
- Higher loan amounts: Diamond Banc’s staff are true jewelry experts, who take every value-adding factor into consideration to offer you the maximum loan amount. We are in the business of loaning money and want to loan clients the most possible. In addition, the majority of pawn shops don’t have the capital on hand to make large loans. Diamond Banc regularly makes loans from $20,000 – $250,000 and has the ability to fund transactions up to $1,000,000.
- Our loan & buy offers are the same: Most pawnshops will offer to loan you less for your item than they will buy it for. This makes no sense to us! At Diamond Banc our loan offer and buy offers are almost always the same.
- Much lower interest costs: Diamond Banc typically charges 50% – 80% less than the standard pawn industry interest rates allowed by law.
- We want you to get your items back: Diamond Banc has plenty of its own jewelry! We want you to get yours back. With most pawn loans, every 30 days you can pay only the interest due or ALL of the principal and interest due. This structure is good for the pawn lender, but not for the borrower. With a loan from Diamond Banc, providing your loan charges are current, any extra amount that you wish to pay goes directly towards your loan’s principal balance, thus lowering your monthly interest costs moving forward.
- Loan re-advancements: Let’s say you borrowed $10,000 against your Rolex from Diamond Banc and have paid down your balance to $3,000 (not an option with most standard pawn loans) and something else comes up, Diamond Banc can increase your loan by re-advancing you the $7,000 you paid back, thus bringing your loan balance back up to the original $10,000. You can draw your loan up as often as you wish, and carry your balance as long as needed, providing your interest charges have been paid as agreed and your loan is in good standing.
- Your items are insured: If you read the fine print on most pawn loan paperwork you will discover that your item is not insured in the event of a loss or theft during the life of your loan. At Diamond Banc, all loan collateral is insured for the amount of the loan, or sometimes for more during your loan period.
How Are Diamond Banc’s Jewelry Pawn Loans Structured?
Our jewelry pawn loan structure is designed to be quick, efficient, and secure. The process is as follows:
- Once the collateral is received and verified, all loan documents are completed, then funds will be issued via immediate check or wire transfer.
- For the duration of the loan, your collateral is stored in our insured vaults.
- Once your loan is repaid, the collateral is promptly returned to you.
- Your loan balance can be drawn up and down as needed, much like a traditional line of credit.
Terms of Your Loan Outlined:
- Your loan is a 30-day loan that can be extended for as many 30 day periods as needed, as long as the minimum monthly cost of funds is paid every 30 days.
- As soon as the loan is originated, the first 30 day billing period is accrued and is then due 30 days from the date of origination. The cost of funds is accrued in full 30 day periods and is not prorated.
- Since not every month has exactly 30 days in it, the due date will move forward over time – it’s advised to schedule your payments before the official due date.
- The minimum cost of funds is not applied towards the principal balance.
- To reduce your loan balance, you must make a payment above your minimum monthly cost of funds. It is your responsibility to contact our office to arrange additional principal payments during your loan. Your loan is only eligible for principal payments providing it is in good standing and no unpaid cost of funds is due.
- The length of the loan is solely dictated by you. Take as little or as long as you need to repay the principal balance.
- We have clients secure the minimum monthly cost of funds payment via credit/debit card which is automatically processed each month. This keeps the account current and in good standing.
Explaining Our Loan Costs
Diamond Banc’s average loan size is small and the duration of our loans is much shorter than traditional loans. As a byproduct, our rates must be greater than traditional loans. Our average loan is approximately $6,000 and is repaid within 6 months. By contrast, a 25 – 30 year mortgage bears a lower interest rate because the amount financed is much greater and the repayment term is MUCH longer. On a typical home loan, a person pays hundreds of thousands of dollars in interest and 80% of early mortgage payments go towards interest. The majority of credit card balances are carried for years and still bear a notable interest rate.
The collateral we accept is not accepted by traditional banks. The luxury market and the value of your collateral can quickly change and we must be compensated for this risk. It also takes a unique expert skillset to evaluate and verify the collateral we lend against.
Our loans are non-recourse, meaning if you don’t pay the loan back your credit is not affected. Nothing negative happens outside of you forfeiting your ownership in the pledged collateral if you default on your loan with Diamond Banc.
Diamond Banc’s own cost of capital is above market benchmarks due to the specialized type of lending we engage in. Obviously, we must charge above our own cost of funds to cover overhead, justify the risk and allow for a return.
Diamond Banc loan products are ideal options for people wanting to borrow money for 1 – 6 months. We do not recommend using our loan service for long-term financing.
In most cases, Diamond Banc charges 50% – 80% less than what is allowed by law for the type of loans we make.
How Does a Traditional Jewelry Pawn Loan Work?
There are many misconceptions about pawn jewelry loans and what pawning your jewelry actually means. Pawning a piece of jewelry in the traditional sense is simply pledging the item for collateral and borrowing money against it. Pawning your jewelry does not mean that you are selling the item, although most pawn shops offer that service as well. The universal pawn symbol, which features three globes, stands for “Buy, Sell, Trade”. Pawning jewelry is actually a form of asset-based lending, which is the oldest type of lending structure and offered more widely in countries outside of the United States. Pawning jewelry has earned a questionable reputation because oftentimes the general terms provided are pro lender and the client experience is often unpleasant.
What is the Structure of a Traditional Jewelry Pawn Loan?
- The borrower pledges a piece of jewelry as collateral for a loan and the pawnbroker holds the collateral in their possession for the duration of the loan. The pledged piece of jewelry should be free of title, debt, or encumbrance from the borrower prior to pledging.
- The loan value offered by the pawnbroker varies greatly based on their product knowledge, liquidity position, and ethics, but is often 15% – 30% of the original purchase price of the jewelry. In the event the loan is not repaid, the pawnshop wants the ability to quickly sell the item to a wholesale jewelry dealer.
- In most cases, the loan interest accumulates in 30 day periods and is not prorated by the day like a traditional loan (e.g., car loans). This means that if you borrow the money for 1 day or 29 days, the interest cost is the same.
- Every 30 days you can either pay just the minimum interest required, or the entire principal balance plus the interest that has accumulated. This is unlike a traditional loan, where the borrower can pay over the required payment to have the funds go towards the principal balance, thus lowering their interest expense
- Depending on the state and jurisdiction governing the pawn loan, missing 1 to 3 payments results in the client defaulting and forfeiting ownership of the pledged collateral.
- It is the client’s responsibility to make their payments every 30 days and the pawnshop usually will not follow up with the client to ensure their account is up to date.
- Oftentimes, the pawnshop will have the piece of jewelry in their showcase with the intent of pre-selling the item in the event the loan defaults.
- The fine print on most pawn tickets states that your item is not insured during your loan, therefore if it is lost or stolen then you are without your item.
- An advantage of any jewelry pawn loan is that it is non-recourse, meaning it does not affect your credit in the event you do not repay the loan as the loan is solely secured by the item pledged as collateral. Often, income verification and credit checks are not required to obtain the loan.
What is the Cost of a Jewelry Pawn Loan?
The monthly charges of a pawn loan often include storage fees, insurance, and interest, but generally, these equate to the pawnshop collecting all of the funds as one bundled rate of “interest”. The maximum pawn charges are determined and governed by each state and vary widely. These interest rates generally vary from 36% APR to 300% APR. Pawn loans are often explained and sold by the monthly cost of funds, such as 3% per month, up to 25% per month.