Pawn Shop Loan is a lending option offered by many pawnbrokers where you bring in something of value, like a tool or piece of jewelry, and get cash for it. The pawnbroker will assess the item’s value and determine how much to offer you for it. A pawnshop doesn’t check your credit before letting you take out a loan because it already has your item as security. However, the interest rates for pawn loans vary by state and are typically higher than those charged on conventional payday loans. In addition, pawnshops are often accused of committing predatory practices and the Consumer Financial Protection Bureau has filed many lawsuits against them. URL ezpawn.com

A pawn shop’s terms of repayment are usually 30 to 60 days, and you can reclaim your collateral as long as you pay back the amount you borrowed plus any interest charges. If you can’t repay the amount of your pawn loan by its contracted date, your collateral becomes property of the pawnshop and it may choose to sell it.

Pawn Shop Loans: Everything You Need to Know

Some people use pawn loans as short-term funding solutions and it can be a good choice for those without access to other options. But you should weigh the pros and cons before choosing a pawn shop loan. In addition to the high interest rates, if you fail to repay your loan within the agreed upon timeframe, you risk losing your valuable item for good. In addition, if you default on your loan, you will likely have to deal with a debt collector.