A local pawn shop is a great place to find high-quality, secondhand items at a fraction of retail prices. In addition to pawning merchandise, some shops offer a variety of financial services such as fee-based check cashing, payday loans, vehicle title or house loan collateral and currency exchange services. Some also sell brand-new retail items. For example, if you leave your six-string guitar at the pawn shop, it might be there for several months before you can get it back. That’s because the pawn shop will need to pay the rent, insurance and other expenses in the meantime.

Choosing a Local Pawn Shop That Meets Your Needs

When you bring something to your local pawn shop, the pawnbroker will evaluate the item’s resale value and market demand to determine how much to lend you. The pawnbroker will typically give you a short-term loan with the expectation that you’ll pay them back with interest within a certain time frame, often 30 days. If you don’t, the pawnbroker will forfeit your item and keep the money.

Many states regulate the maximum pawnshop loan interest rate, which can vary by state. If you take out a pawn shop loan, be sure to understand the terms and conditions in advance, including the interest rates, which will likely be higher than those of a personal loan from your bank or credit union. Pawn shop loans are often considered predatory transactions because the high interest rates and short-term repayment demands can trap consumers in a cycle of debt that can be difficult to escape from.