How Much Do Pawn Shops Charge For Loans – ANSWERED!

Brian McCracken


Pawn shop loans are very affordable compared to many other short term cash loan options that are on the market today.
When it comes to the loans that you can get a a pawn shop, there is always one question that I often hear asked from people that don’t understand pawn shops incredibly well.
That is very simple, how much do pawn shops charge for loans?
You see, some people are afraid that pawn shops charge enormous amounts for the loans they make, while others really just don’t even know where to begin on what to think about pawn loans.
So, with that in mind, I suppose it’s best that we start at the beginning just so that everyone is on the same page and know how this all works.
Getting a loan from a pawn shop is a pretty easy process. You take something of value into the store and they will look it over to try to establish a fair used value for the item.
They will make you an offer based on the value that they were able to determine and if that works for you, then they will make you a cash loan on the spot – which is otherwise known as a pawn loan – because you are pawning something to get the loan.
While you have the cash loan out, the pawn shop will keep your items in storage until you come back for them. During this period of time, they will charge you interest on the loan, and there may be some other fees as well depending on the state.
When you pay back the principle of the loan (or how much you borrowed) plus the interest and other fees, you will get your items back.
When it comes to consumer loans, there is a lot of anxiety about what the charges may be for them, but when it comes to how much pawn shops charge for their loans, you will find that they are one of the most affordable forms of short term financing available anywhere.
So How Much Is The Interest And Fees
Well, that unfortunately is a tougher question to answer on a national level unfortunately.
You see, pawn shop interest rates are determined on a state and local level and because of that, it’s just about impossible for a site like this to tell you exactly what you state and local laws will be regarding what a pawn shop will charge you in interest on a pawn loan.
That having been said, I can tell you that the interest rates vary from 2-25% depending on where you live. Typically speaking, if you live in a “Blue” state, the interest rates will be lower while in southern and “Red” states, the interest rates are almost always higher.
The individual fees that a pawn shop can charge you are also set by state and local laws, but they typically are very reasonable.
For instance, a pawn shop may charge you a few dollars for setting up the loan initially. Or there may be a small monthly storage charge. But none of these ‘extra fees’ are ever very onerous by any means.
Are Pawn Loans Affordable
Pawn loans are widely considered one of the most affordable forms of short term financing that is widely available to the consumer market.
They have long since been established as being a much lower cost alternative to something like a payday loan, cash advance loan, or many of the other ‘consumer loans’ that you may typically find offered at places like check cashing stores.
The fact of the matter is that pawn shops serve as an unique utility in their communities by offering affordable financing options for their customers. There really is no other industry that makes money available so easily to their customers and at rates that are extremely affordable.
Additionally, other financial instruments and loans can sometimes have fairly confusing terms associated with them, while a pawn loan is very straight forward. You are collateralize by the items you bring in and if you can’t pay back the loan, there’s nothing that happens to your credit and no collections, etc.