Getting a pawn loan is easy. You bring in collateral in exchange for cash. Once you have paid that cash back plus interest you get your item back.

Most people who take out a pawn loan are facing some kind of emergency expense in which case every dollar you get from your loan counts. Understanding the way pawn loans work and how the pawnbroker makes money is the best way for you to get the most from your collateral loan.

Pawnbrokers make money on the interest paid for your loan. The first thing you need to understand about getting a higher dollar amount for your pawn loan is how to confidently negotiate. A pawnbroker’s bread and butter is the interest made on a pawn loan and the vast majority of borrowers do pay off their loans and retrieve their collateral.  However, a pawnbroker also needs to be able to recoup their investment should a borrower not repay their loan.

As a borrower be aware that no matter how good your negotiation skills a pawnbroker will not give you more than what they believe they can resell your item for. Therefore, knowing what sells best in a pawn shop is the second part of getting a bigger pawn loan.

Classic items that do well in pawn shops are fine jewelry, including Rolex watches, diamond jewelry and gold. For more money you should pawn your Rolex before you pawn tools or electronics. Bringing in any boxes, manuals or other accessories increases the worth of your collateral as well. For example if you simply bring in your Rolex you may get less than if you bring in your Rolex with the box you purchased it in as well as any other receipts or paperwork you have on your watch. The higher the value of your collateral the higher your loan limit will be. However, you can also make an effect on your loan by negotiating and taking other steps to show the pawnbroker the value of your collateral.