The idea of getting a loan at a nearby pawn shops might sound like an easy fix for short-term cash needs. You bring in a valuable item, such as jewelry or a game console, and the pawnbroker estimates its resale value. Then you receive a cash amount and have 30 to 60 days, including interest, to repay it or redeem it (that is, get your property back). A pawn loan doesn’t require credit checks and won’t affect your credit score. However, it’s important to understand the risks before you bring in Grandma’s gold necklace or your cherished tools for a cash advance at your local pawn shop.

The Upsides and Downsides of Pawn Shop Loans

Pawn shops have long been a popular option for people to get quick cash without putting up any collateral, but they come with significant fees and high interest rates. It’s also important to keep in mind that if you fail to pay back your loan, the pawn shop can sell the item to recoup its investment.

Before you bring in a valuable item to a pawn shop, do your research. Look online for an estimate of the item’s resale value and make sure it’s free of scratches, dents and other signs of wear. Also, consider a more responsible way to borrow money, such as a Credit Builder loan from MoneyLion. It offers competitive interest rates, monthly credit reporting, and Lion’s Share perks that pawn shops can’t match.