What exactly is pawnbroking?


Pawnbroking has a long and established history, stretching back more than 3,000 years to ancient China.



It was by pawning the jewels of Queen Isabella of Spain in the 15th century that the expedition to the Americas by Christopher Columbus was funded.

Modern pawnbroking owes its origins to the Medici family in Italy, which broke into two branches.

One branch became bankers, the other pawnbrokers.

The Medici family crest incorporates the familiar three balls that became synonymous with pawnbroker shops, particularly in 19th century Britain.

At the end of the 19th century there were as many pawnbrokers as public houses in Britain.

pink gold ring with diamond
gold necklace

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Today, pawnbroking services provide a valued and valuable alternative to a wide range of different people who want to access an easy, straightforward form of lending.

There are around 290 different firms offering pawnbroking services to tens of thousands of customers every day.

In fact, it’s estimated that pawnbroking firms service 350,000 customers every year with an annual lending figure around £300 million.

The sector employs just under 6,000 people, and there are more than 1,000 stores on UK high streets.

They cater for people for whom the High Streets lenders cannot offer the same quick and accessible service.

As technology and consumer expectations change, so too does the pawnbroking industry, and with the emergence of online options there’s now no need to visit a physical shop.

Who uses online
pawnbroking services?

In a word, everybody!

Pawnbroker services appeal to a wide range of people, not just those who find it challenging to access other forms of credit.

Its main appeal is speed and convenience.

Most customers borrow money to satisfy a short-term cash flow issue, and all sections of society can be impacted by cash flow issues at different times in the month or year.

Increasingly, larger loans are being offered against items of significant value, such as family heirlooms.

This can often be an option for people who are asset-rich but who face a short-term cash flow problem due to challenges in their business or personal lives.

How does online
pawnbroking works?

As with a bank or other lender, a pawnbroker earns interest that is charged on the loan of a pledged item. In order to accept goods into pawn, a pawnbroker makes an on-the-spot valuation of the goods.

The customer and the pawnbroker will agree the sum to be lent and the pawnbroker and the customer complete a loan application process. The pawnbroker will take possession of the item for the duration of the loan.

At the end of the term, the loan will be repaid, and the item will be returned to the customer. Should the loan remain unpaid, the customer will forfeit the item.

The item will then be resold, or sent to auction to raise the value of the loan. Should the amount raised be more than the amount left outstanding, surplus funds will usually be returned to the customer.

A trusted and licensed service

The National Pawnbrokers Association (NPA) is recognised and respected by the Office of Fair Trading, and Trading Standards.

Each NPA member is visited by either a committee member of many years of service or the Chief Executive and all must comply and be up to date with the law and our Association’s Code
of Practice.