- \n
- What is a pawn shop loan?<\/a><\/li>\n
- Pawn shop loan requirements<\/a><\/li>\n
- Beware of pawn shop loan fees and interest rates<\/a><\/li>\n
- A personal loan could be a better option<\/a><\/li>\n
- Alternatives to a pawn shop loan<\/a><\/li>\n<\/ul>\n
<\/a><\/p>\n
What is a pawn shop loan?<\/h2>\n
A pawn shop loan is a secured, short-term loan<\/a> you can get from a pawn shop. These loans don\u2019t require a credit check or have any specific requirements other than the item you leave as collateral for the loan.<\/p>\n
You\u2019ll typically walk away with around 25% to 60% of the pawned item\u2019s 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.<\/p>\n
Be careful!<\/b> Although rates are not as bad as the typical payday loan<\/a> or auto title loan, you\u2019ll still pay huge costs and fees for this type of loan.<\/div><\/div>\nOne 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.<\/p>\n
Some pawn shop loans charge over 200% APR. In Texas, for example, the maximum pawn shop rate is 240% APR.<\/p>\n
Pawn shop loan requirements<\/h2>\n
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.<\/p>\n
Here are common requirements for pawn shop loans:<\/p>\n
- \n
- Valuable item: <\/b>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.<\/li>\n
- Government ID: <\/b>Most lenders will require you to show a valid government ID so they can verify you are legally able to take out the loan.<\/li>\n<\/ul>\n
Keep in mind that unlike a conventional installment loan<\/a>, a pawn shop loan doesn\u2019t 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.<\/p>\n
Check Out: <\/i><\/b>Personal Loan Requirements<\/i><\/b><\/a><\/p>\n
What you can pawn<\/h3>\n
You can pawn almost anything of value. Some common items used for pawn shop loans include:<\/p>\n
- \n
- Jewelry<\/li>\n
- Precious metals or jewels<\/li>\n
- Coins<\/li>\n
- Electronics<\/li>\n
- Game systems<\/li>\n
- Musical instruments<\/li>\n
- Guns<\/li>\n
- Motorcycles<\/li>\n
- Cars<\/li>\n
- Collectibles<\/li>\n<\/ul>\n
Learn More: <\/i><\/b>Cash-Advance Loans<\/i><\/b><\/a><\/p>\n
<\/a><\/p>\n
Beware of pawn shop loan fees and interest rates<\/h2>\n
If you decide to take out a pawn shop loan, be sure you fully understand what you\u2019re 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.<\/p>\n
Most pawn shop loans charge a monthly interest rate. If you can\u2019t 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.<\/p>\n
Here are a few examples of the maximum rates*<\/sup> charged by pawn shops in some states:<\/b><\/p>\n- \n
- California:<\/b> 2.5% per month<\/li>\n
- Florida:<\/b> 25% per month<\/li>\n
- Illinois:<\/b> 3% per month<\/li>\n
- New York:<\/b> 4% per month<\/li>\n
- Pennsylvania:<\/b> 2.5% per month<\/li>\n
- Texas:<\/b> $20 per month<\/li>\n<\/ul>\n
*<\/sup>Rates as of October 2020<\/i><\/small><\/div><\/div>\n
Before pawning an item, look up your state\u2019s laws regarding pawn shops to ensure your loan doesn\u2019t overcharge.<\/p>\n
Learn More: <\/i><\/b>Secured Personal Loan<\/i><\/b><\/a><\/p>\n
<\/a><\/p>\n
A personal loan could be a better option<\/h2>\n
If you have decent credit and verifiable income, a personal loan<\/a> could be a better option than a pawn shop loan.<\/p>\n
Personal loans come with much lower interest rates than pawn shop loans, as well as longer repayment terms. They\u2019re available in a wide variety of amounts, such as a $5,000 personal loan<\/a> up to a $100,000 personal loan.<\/p>\n
Tip:<\/b> Some lenders allow cosigners on personal loans. You might be able to get a lower interest rate on a cosigned personal loan<\/a> than you would on your own.<\/p>\nThere are also personal loans for fair credit<\/a> and personal loans for bad credit<\/a> that you might qualify for, even without a cosigner.<\/div><\/div>\n
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.<\/p>\n
Credible makes this easy \u2014 you can compare your prequalified rates from our partner lenders in the table below in two minutes. Just keep in mind that you won\u2019t be able to get a personal loan with a cosigner through Credible.<\/p>\n\n
- Florida:<\/b> 25% per month<\/li>\n
- California:<\/b> 2.5% per month<\/li>\n
- Government ID: <\/b>Most lenders will require you to show a valid government ID so they can verify you are legally able to take out the loan.<\/li>\n<\/ul>\n
- Pawn shop loan requirements<\/a><\/li>\n
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