Need quick cash and have gold to spare? Pawning gold (pajak gadai) is one of the fastest ways to turn jewellery, coins or bars into short-term cash in Malaysia. This guide walks you through how pawning works, the difference between conventional pawn shops and Islamic Ar-Rahnu, what to expect at a visit, how value and loan amounts are calculated, sample numbers, tips to get the best deal, warnings, and smart alternatives.
Pawning gold is a secured short-term loan: you pledge a gold item as collateral to a licensed pawnbroker or an Islamic Ar-Rahnu provider and receive cash immediately. If you repay the loan (plus fees) within the agreed tenure you get your gold back; if not, the pawnbroker may sell the gold to recover the loan. Ar-Rahnu is the Shariah-compliant pawnbroking product offered by banks and cooperatives across Malaysia.
Licensed pawn shops (kedai pajak gadai) — long history in Malaysia under the Pawnbrokers Act; many are private businesses that accept a wide variety of items (gold, watches, electronics). They set their own margins, rates and loan-to-value based on market practice.
Ar-Rahnu (Islamic pawnbroking) — offered by Islamic banks and cooperatives as a Shariah-compliant product with clearly defined profit charges and product rules; usually limited to gold/gold jewellery. Many customers prefer Ar-Rahnu for its religious-compliance and transparent pricing.
Bring your gold + ID (NRIC/passport). Most licensed providers require original ID.
Testing & valuation — staff will test purity (e.g., 999, 916, 750), weigh it and translate that into a marhun/market value using the current gold price. Many providers publish daily gold tables.
Offer / Loan-to-Value (LTV) — the pawnbroker offers a loan amount, typically a percentage of the marhun value (common LTVs in practice range up to ~60–80% depending on the provider and item). For example, some bank Ar-Rahnu packages allow financing up to 80% of the jewellery’s marhun value.
Paperwork & collateral receipt — you sign the contract and receive a pawn ticket/receipt that you must keep to redeem the item.
Repayment / TeBus — repay principal + fees within the tenure to reclaim your gold. If not repaid, the pawned item may be sold. Ar-Rahnu tenures and redemption rules are usually clearly stated.
Gold price (example): On 16 Oct 2025 PAJAKING lists 999 gold at RM392 per gram (prices update daily across providers). Use the daily table at your chosen pawnbroker.
Loan-to-Value (LTV): Banks like Bank Rakyat indicate margins of financing up to 80% of the marhun value for jewellery in certain products. Private pawnshops may offer 50–75% depending on item type and policy.
Fees / profit/interest: Ar-Rahnu/Islamic pawn products often state a profit charge (e.g., Bank Muamalat’s Ar-Rahnu example uses a profit charge equivalent to ~11.25% p.a. (0.9375% monthly) in published product pages). Conventional pawnshops commonly charge monthly interest/provision fees — advertised ranges vary (many advertise ≤2% per month). Always check the contract for late charges, storage fees and insurance coverage.
Worked example
You bring 10 g of 999 gold. Using the PAJAKING example price RM392/g:
Marhun (market) value = 10 × RM392 = RM3,920. Pajaking
If the lender offers 80% LTV, loan amount = 0.80 × RM3,920 = RM3,136.
If the monthly profit/fee is 0.94% (approx. Ar-Rahnu example), monthly charge ≈ RM29.49; for 3 months ≈ RM88.47. Total repayable = RM3,136 + fees (≈RM3,224.47). Exact numbers depend on provider terms.
NRIC or passport (original)
The gold item(s) — clean and ideally with any original receipts if you have them (helps with verification)
Some operators may request proof of income for larger loans or if you’re trying to access higher LTV limits.
Search Google Maps / Apple Maps for “pawn shop”, “kedai pajak gadai”, or “Ar-Rahnu” + your town (e.g., “Ar-Rahnu KL”, “pajak gadai Penang”). Read recent reviews — speed, transparency and reputation matter. (Local listing aggregators such as Yelp / local directories also help.) Yelp+1
Look for licensed pawnbrokers (many websites show licensing). For Ar-Rahnu, bank branches or cooperatives with Ar-Rahnu branding are generally safer and have standardised product terms.
Compare 2–3 providers the same day — gold prices and LTVs vary between shops.
Ask for the LTV and all fees upfront — monthly charge, admin, storage, insurance and late penalties. Put it in writing before accepting.
Clean and present jewellery well — less tarnish and clear design/classification can make appraisal simpler.
Know the current gold price (check online or on pawnbroker’s live rate board) so you can evaluate the offered marhun value. Pajaking
Prefer licensed players (banks, well-known pawn chains) for higher trust, documented procedures and potential better LTVs.
Unlicensed/unregistered shops — avoid them. Check for a physical address and reviews.
Vague or hidden fees — if they can’t clearly show how interest/profit is calculated and what happens at default, walk away.
Low offers far below current gold value — ask them to show the math (purity test, weight, price per gram they use).
No pawn ticket/receipt on completion — always insist on official documentation to redeem your item later.
Sell the gold outright — if you don’t want future debt and you’re willing to part with the item. Jewellery dealers and online buyers buy at close to market but usually deduct a margin.
Gold-backed financing from banks — some banks offer structured gold-backed financing products with different tenures/limits (Ar-Rahnu variants).
Personal loan — may be cheaper for larger, longer-term sums if you qualify.
Sell to trusted local buyer and buy back later — sometimes sellers and buyers can arrange a sale + buy-back, but beware of taxes/fees and trust issues.
Ar-Rahnu product pages (Bank Islam / Bank Muamalat) — for formal product rules and profit calculations.
Bank Rakyat Pawn Broking product page — example of LTV and product limits.
PAJAKING / other pawn-rate aggregators — check daily price tables to verify the rate used by the pawn shop. (Rates change daily; always confirm on the day you pawn.)
Q: Can foreigners pawn gold in Malaysia?
A: Yes — many licensed pawnshops and Ar-Rahnu providers accept foreigners, though ID requirements (passport) and specific policies vary.
Q: How long can I pawn for?
A: Tenures differ by provider — commonly 1–6 months for Ar-Rahnu, sometimes longer for special products. Check the contract.
Q: Will my gold be insured while pawned?
A: Some pawnshops/Ar-Rahnu providers include basic insurance or safekeeping; confirm coverage and liability in writing.
Q: Can I sell pawned gold instead of redeeming?
A: If you don’t redeem, the pawnbroker will sell the item after contract default. If you want to sell now, compare offers from multiple buyers — selling yields cash without later fees.
Check today’s gold price (per gram for the purity you have). Pajaking
Bring original ID + item (and receipts if available).
Ask and get in writing: offered loan amount, LTV, monthly charges, tenure, redemption process, storage/insurance, late fees and the exact procedure for default.
Compare at least two providers (private pawnbroker vs Ar-Rahnu bank/co-op) before accepting.