If you have valuable jewelry lying around and are in need of a loan, then you might want to consider taking out a jewelry loan at your local pawn shop. A jewelry loan allows you to place your valuable jewelry as collateral for a loan that's typically based on the value of the piece itself. Once you pay your loan back (along with any interest and fees), you'll receive your jewelry back. Before you take out a jewelry loan, however, there are some all-too-common mistakes you'll want to be careful to avoid.

Confusing the Appraisal Number with Your Offer

It's typically a good idea to have your jewelry appraised before you decide to pawn or sell it. This will help you get a professional opinion when it comes to the value of your piece. However, you shouldn't expect to be offered the appraisal value of your jewelry for your loan. After all, a pawn shop cannot make money if it buys at appraisal price; instead, the appraisal price is generally seen as a guide to how much the retailer could possibly sell it for. In order to make a profit, you should expect the pawn shop's loan offer to be a bit lower.

Assuming Damaged Jewelry Has No Value

Another mistake people make when it comes to obtaining jewelry loans is assuming that just because a piece of jewelry has a broken chain or other cosmetic damage, that it's going to be worthless. This couldn't be further from the truth, in most cases. At the end of the day, most pawn shops don't care about the physical appearance of a piece of jewelry. Instead, they care most about how much the piece would be worth if they melted it down and sold the metal. Therefore, you shouldn't let cosmetic damage deter you from trying to get a jewelry loan if you need one.

Confusing Solid Gold With Gold-Plating

Finally, understand that there's a huge difference between a piece of solid gold jewelry and a piece of jewelry that's gold-plated. Solid gold has significantly higher value because it's made entirely of precious metal. Something that's gold-plated, on the other hand, may not hold much value because it consists of a piece of cheaper metal that's been covered in a layer of gold. Make sure you know whether your jewelry is solid gold or gold-plated before you bring it into a pawn shop.