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When you think of pawn shop loans, you might think of haggling over the price of antiques and collectibles. But pawn shop loans are also a major industry where you can get cash in exchange for your valuable items.
However, they aren’t always a good idea.
Here’s what you should know about pawn shop loans:
- What is a pawn shop loan?
- Pawn shop loan requirements
- Beware of pawn shop loan fees and interest rates
- A personal loan could be a better option
- Alternatives to a pawn shop loan
What is a pawn shop loan?
A pawn shop loan is a secured, short-term loan you can get from a pawn shop. These loans don’t require a credit check or have any specific requirements other than the item you leave as collateral for the loan.
You’ll typically walk away with around 25% to 60% of the pawned item’s value, with the average loan being $75 to $100. If you pay off the loan in a certain amount of time, you can get your item back.
One pawn shop shared that costs are typically around 20% to 25% interest per month plus any fees. That’s the same interest rate many credit cards charge per year, so pawn shop loans should really be considered a last resort for most households.
Some pawn shop loans charge over 200% APR. In Texas, for example, the maximum pawn shop rate is 240% APR.
Learn More: No Credit Check Personal Loan
Pawn shop loan requirements
One benefit of pawn shop loans is how easy they typically are to get. In many cases, you only need a valuable item and a government ID.
Here are common requirements for pawn shop loans:
- Valuable item: The main need for a pawn shop loan is a valuable item. For example, jewelry, electronics, guns, or vehicles might serve as collateral. If you and the pawn shop can agree on the value and loan amount, it can secure a pawn shop loan.
- Government ID: Most lenders will require you to show a valid government ID so they can verify you are legally able to take out the loan.
Keep in mind that unlike a conventional installment loan, a pawn shop loan doesn’t require a specific credit score or a cosigner. As long as you can provide a valuable item and a government ID, you could walk out with cash in the same visit.
Check Out: Personal Loan Requirements
What you can pawn
You can pawn almost anything of value. Some common items used for pawn shop loans include:
- Jewelry
- Precious metals or jewels
- Coins
- Electronics
- Game systems
- Musical instruments
- Guns
- Motorcycles
- Cars
- Collectibles
Learn More: Cash-Advance Loans
Beware of pawn shop loan fees and interest rates
If you decide to take out a pawn shop loan, be sure you fully understand what you’re signing up for. Every state has its own laws and maximums around what pawn shops can charge, but no matter where you live, a pawn shop loan is still likely one of your most expensive options to borrow money.
Most pawn shop loans charge a monthly interest rate. If you can’t pay your loan back on time, it might roll into the next month, adding another month of interest. As interest adds up, your loan might end up costing more than the item you pawned to begin with.
- California: 2.5% per month
- Florida: 25% per month
- Illinois: 3% per month
- New York: 4% per month
- Pennsylvania: 2.5% per month
- Texas: $20 per month
*Rates as of October 2020
Before pawning an item, look up your state’s laws regarding pawn shops to ensure your loan doesn’t overcharge.
Learn More: Secured Personal Loan
A personal loan could be a better option
If you have decent credit and verifiable income, a personal loan could be a better option than a pawn shop loan.
Personal loans come with much lower interest rates than pawn shop loans, as well as longer repayment terms. They’re available in a wide variety of amounts, such as a $5,000 personal loan up to a $100,000 personal loan.
There are also personal loans for fair credit and personal loans for bad credit that you might qualify for, even without a cosigner.
If you think a personal loan could be right for you, be sure to shop around and consider as many lenders as possible to find a loan that fits your needs.
Credible makes this easy — you can compare your prequalified rates from our partner lenders in the table below in two minutes. Just keep in mind that you won’t be able to get a personal loan with a cosigner through Credible.
| Lender | Fixed rates | Loan amounts |
|---|---|---|
 View details | 9.95% - 35.99% APR | $2,000 to $35,000** |
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state. **Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. |
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 View details | 6.49% - 29.99% APR | $5,000 to $35,000 |
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 View details | 5.99% - 29.99% APR | $5,000 to $50,000 |
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 View details | 6.99% - 24.99% APR | $2,500 to $35,000 |
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 View details | 7.99% - 29.99% APR | $10,000 to $35,000 |
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 View details | 10.68% - 35.89% APR | $1,000 to $40,000 |
LendingClub personal loans review †Based on a majority of borrowers from LendingClub's marketing partners who were issued loans between 1/1/19-12/13/19. The time it takes for your loan to be funded may vary. |
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 View details | 15.49% - 35.99% APR | $2,000 to $25,000 |
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 View details | 3.99% - 19.99% APR | $5,000 to $100,000 |
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 View details | 6.99% - 19.99% APR1 | $3,500 to $40,0002 |
1Rate reduction of 0.25% available for AutoPay. 2You may be required to have some of your funds sent directly to pay off outstanding unsecured debt. 3After making 12 or more consecutive monthly payments, you can defer one payment as long as you have made all your prior payments in full and on time. Marcus will waive any interest incurred during the deferral and extend your loan by one month (you will pay interest during this extra month). Your payments resume as usual after your deferral. Advance notice is required. See loan agreement for details. |
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 View details | 18.00% - 35.99% APR | $1,500 to $20,000 |
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 View details | 5.99% - 24.99% APR | $5,000 to $40,000 |
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 View details | 6.49% - 17.99% APR | $600 to $20,000 (depending on loan term) |
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 View details | 6.95% - 35.99% APR | $2,000 to $40,000 |
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 View details | 5.99% - 18.83% APR | $5,000 to $100,000 |
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 View details | 10.97% - 35.93% APR7 | $1,000 to $20,000 |
7Personal loans made through Universal Credit feature APRs of 10.97%-35.93%. All personal loans have a 4.25% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Information on Universal Credit’s lending partners can be found at https://www.universal-.credit.com/landing/lendingpartners 8Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. You may be required to have some of your funds sent directly to pay off your credit cards. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from your bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. Personal loans made by Universal Credit's lending partners. Information on Universal Credit's lending partners can be found at https://www.universal-credit.com/landing/lendingpartners. Please refer to Universal Credit's Terms of Use and Borrower Agreement for all terms, conditions and requirements. 9Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds sent directly to you should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to two (2) weeks to clear, depending on the creditor. |
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 View details | 6.94% - 35.97% APR | $1,000 to $50,000 |
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 View details | 8.27% - 35.99% APR4 | $1,000 to $50,0005 |
4The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 25.79% and 36 monthly payments of $37 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved. 5This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website. Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100. 6If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law. |
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Alternatives to a pawn shop loan
Fortunately, you have other options besides pawn shop loans. Here are some alternatives to pawn shop loans that may offer a better deal:
- Ask for an extension: If you’re temporarily short on cash to pay a bill, call your creditor to see if you could possibly have more time to pay.
- Bill payment assistance: Depending on your situation, you could qualify for bill payment assistance through a government program. For example, the U.S. government rolled out several assistance programs in response to COVID-19.
- Use a credit card: Although credit cards can have high interest rates, you might not pay any interest if you’re able to pay off your credit card balance by the due date. Even if you do have interest charges, you’ll typically pay less than 30% per year, which is much less than many pawn shop loans.
- Sell your item: Instead of pawning an item with high costs, consider selling it to the pawn shop or through an online site. This way, you’ll have your cash without worrying about paying it back later.
- Take out a personal loan: Rates on personal loans are typically much lower than pawn shop loans. Depending on the lender, the time to fund for a personal loan might be as soon as the next business day.
| Loan type | Average interest rate | Loan amount | Min. credit score | Time to fund |
| Pawn shop loan | 12% to 240% (can be higher depending on the pawn shop) | Generally 25% to 60% of pawned item's value | N/A | Same day |
| Payday loan | 300% to 500% APR (can be higher depending on the lender) | Typically $50 to $1,000 | N/A | Same day |
| Personal loan | Varies | $600 to $100,000* (depending on the lender) | Varies | Typically less than 5 business days |
| * With Credible's partner lenders | ||||
Pawn shop loans come with incredibly high costs, which should make them a last resort. Generally, personal loans are a better financial decision that will cost you much less in the long run.
Before you borrow, estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Keep Reading: Small Personal Loan
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.
