Pawn Shop: 7 Things You Should Know Before Going To One

For consumers looking for quick money, here are some common questions and answers that people should ask when it comes to a pawn shop loan. Use these as tips to consider whether a pawn shop loan is right for you.

1. What Are Pawn Stores For?
A pawnshop's main business like Cashaway is making loans secured by something of value. It may also have other operations, such as selling watches and jewellery. While it's possible to have multiple business elements, such as pawn shops' retail sales, pawnshops mainly focus on providing money based on valuables. Other customers come to pawn stores for shopping affordable second-hand items.

2. How Do Pawn Store Loans Work?
When a customer brings in an item of value, a pawnshop broker like Cashaway will then offer a loan based on its value. The customer will leave the item at the pawn shop until they pay the loan with interest and a fee. These types of businesses are regulated at state, federal, and local levels.

3. How Big of a Loan Can I Get?
The average amount that customers receive from a pawn loan is only a portion of the item's resale value. Since the broker is not buying the item, they have to consider the security, storage, and future demand of the item before making a loan. The average loan amount that a pawnshop broker can offer is $150. However, depending on the value of the item, different amounts can be made.

4. What Interest Rate Will I Be Charged For The Loan?
Interest rates vary depending on the recommendation of the state. In most cases, they are less than the fees associated with bank overdrafts, credit card late fees, and utility re-connection charges. A $100 pawn loan with a 13% interest rate would cost around $13 a month. Many shops offer 90-day loans, though you can always redeem your item at any time.

The minimum interest charges that a pawn store will charge are usually around one month. However, it's important to compare this to other fees such as credit card late fees or an overdrawn bank account. When it comes to choosing a loan amount and rate, be sure to shop around.

5. How Can I Obtain a Pawn Loan?
You only need to provide proper identification and a second-hand item of value to secure a pawn loan. Unlike bank accounts and credit cards, these types of loans do not require a co-signer or a credit check. To determine if the store will accept your item, call the store you're planning on visiting. Some shops only accept certain types of items.

6. What Will Happen If I Can't Pay Back My Pawn Loan?
No matter how bad your financial situation is, a pawn loan on your second-hand items won't affect your credit score. Since the loan is based on the collateral, which is an actual piece of property, it's considered paid in full once the item is turned over to the broker.

7. What Items Do Pawn Shops Accept?
Most pawn shops accept items such as jewellery, electronics, instruments, power tools, antiques, and precious metals. Some shops like Cashaway Pawn Shop will also accept and sell new items such as tattoo supplies and equipment.


Since pawn stores are known to provide a safety net for families who have financial emergencies, they have been able to provide a variety of short-term loans. These types of loans are typically not available from traditional banks.