Updated September 8, 2026 · By Bulawan
How pawnshops compute the loan value
Pawnshops appraise your item by its gold content and lend a percentage of that appraised value. The loan value is always below the reference gold value so the pawnshop is protected if you do not redeem.
- Appraised value = weight × purity × the pawnshop's internal gold rate.
- Loan value = appraised value × loan-to-value ratio (commonly 50–80%).
- Stones, workmanship, and brand usually add little or nothing to the loan value.
Key terms on a pawn ticket
| Term | What it means |
|---|---|
| Principal | The cash you receive |
| Interest rate | Monthly rate charged on the principal (commonly 3–5% per month) |
| Maturity date | Date the loan term ends (usually 30 days, renewable) |
| Expiry / redemption period | Grace period after maturity before the item is auctioned (usually 90 days) |
| Service charge | Fixed fee deducted upfront |
Tips to protect your jewelry
- Know the reference gold value first so you can judge if the appraisal is fair.
- Borrow only what you need — interest is charged on the full principal.
- Mark the maturity and expiry dates and renew before the item is auctioned.
- Keep the pawn ticket safe; it is required for redemption.
- Pawnshops in the Philippines are regulated by the Bangko Sentral ng Pilipinas (BSP); check that the shop is registered.
Frequently asked questions
- How much will a pawnshop give for 18K gold?
- Typically 50–80% of the appraised gold value. For 18K gold, the appraised value is based on 75% purity multiplied by weight and the pawnshop's gold rate.
- What happens if I cannot redeem my gold?
- After the maturity date and the redemption grace period, the pawnshop may auction the item. You lose the item but owe nothing further.
- Can I renew a gold pawn loan?
- Yes. Most pawnshops let you pay the interest due and renew the loan for another term.
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