When people need cash to cover for some emergency expenses, one of the things that immediately come to mind is a pawnshop. However, there is a much better alternative to pawning your diamond jewelry – using it as collateral for a regularized loan from a diamond brokerage business.
What is a Diamond Brokerage Business?
A diamond broker typically extends quick loans to borrowers. The loans are all collateralized by diamonds. Similar to a pawnshop, you can also buy diamonds from a diamond broker – but at highly discounted prices. Likewise, compared to a diamond pawn shop, a diamond brokerage company offers loans at much better terms.
Regularized Diamond Loan vs. Pawned Diamond
As mentioned, obtaining a loan collateralized by diamond jewelry is better than pawning your diamond at a pawn shop in many ways. These include:
Longer Repayment Terms – While pawn shops usually allow you to redeem your pawned jewelry within a few months, three or four months at the most, you can get as much as a 5-year loan term from a diamond brokerage business. This means paying the loan back would be much easier on the pocket.
Prepayment Penalty – With pawnshops, you enjoy no benefits from paying before your due date. In fact you are even penalized by being required to pay the total interest that would have been due at maturity date. In contrast, a diamond broker will allow you to pay your loan in full anytime you are able to. The best part is, you will only be required to pay for the interest computed from the date you obtained the loan, with no prepayment penalty.
To sum everything up, while pawning your diamond jewelry for some quick cash at a pawnshop can help you in your time of financial need, there is a better and more cost-effective way, and that is to use your diamond jewelry as collateral for a regularized loan from a diamond broker.