What Is a Pawn Shop Loan?

A pawn shop loan is available at most pawn shops across the country. To get this type of loan, you are going to need to provide the pawn shop with some form of collateral. The shop is going to appraise the value of that collateral in order to determine how much money you can borrow. The pawn shop is going to give you cash and a ticket that gives you all of the information about the loan.

Terms

Typically, you are going to have approximately 30 days to repay the loan. If you do not repay the loan, the pawn shop is simply going to hang onto your collateral and then sell it. If you do not repay the loan, the pawn shop is not going to report this to the credit bureaus. Therefore, if you are not sure that you can repay the loan, this type of loan can be beneficial because it will not cause any long-term repercussions.

Appraisals

One of the most common problems with this type of loan is that the appraisals are going to be low. This means that you might have to put up more collateral than what you are receiving back in cash from the pawn shop.


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