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Pawn Shop Loans

Thinking about using a pawn shop loan and wondering if there are any better alternatives out there? Don’t act until you know all your options.

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Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on September 12th, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

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Paid in 60 mins if approved*
Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on September 12th, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Need a fast, easy way to access money and not entirely sure what’s your best bet? Pawn shop loans provide one possible solution when you’re short on funds – but they’re by no means the fastest or most convenient way to access cash – and using valuable possessions to secure loans can be a high-risk strategy.

So, what’s better – cash loans or pawn shop loans? If you’re wondering exactly what your best borrowing options are, we’re about to compare the two and find out that cash loans come with better consumer protection than their pawn shop equivalent. And what’s more, it’s fast and simple to apply for a cash loan online, without any need for security – you can get pre-approved in just one minute!

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The difference between a pawn broker loan and a cash loan

Pawn broker loans don’t work like when you borrow money from a bank or an online lender. Instead, borrowers visit a pawn shop and exchange a possession for a short-term cash advance. They typically get up to three months to repay the loan, or they lose the item they pledged.

Payday loans work more like traditional lending. Borrowers apply for a set amount of money and then repay the loan over a period between sixteen days and two years. You don’t need to provide security to get a cash loan.

So, what else makes small personal loans different from pawn broker loans . Let’s compare the possible terms, available amounts, plus security and qualification requirements for each:

Pawn shop loans Cash loans
Terms:
Pawn broker loans generally run for a maximum of three months. Some pawnbrokers offer a rolling contract where as long as you make monthly fee payments, they’ll hold your item indefinitely.
Cash loans can run for up to two years, although you can repay your loan as quick as just 16 days.
Fees:
Pawn shop fees also get based on the value of your advance, but that charge tends to get lower as the advanced amount rises. $1,000 loans typically attract an interest rate of 8 – 10%, while a $10,000 advance may only attract half that. Beware, however, that many pawnbrokers charge rates up to 30%, and it’s vital you remember that pawn shop rates get calculated and charged each month.
When you apply for payday loans, lenders charge capped fees which get based on the amount you borrow. You’ll pay no more than $400 to set your loan up, while borrowers never pay more than 48% of their loan amount in repayment fees over a year.
Security:
You must provide security to use a pawn broker loan.
You don’t need to provide any security to qualify for a cash loan.
Amounts:
Limits vary among different brokers, but it’s not unusual for borrowers to use cars and other high-value items to secure funding of amounts like $20,000.
You can borrow anything between $2,050 and $5,000 when you apply for payday loans.
Qualification:
Anybody can use a pawn broker loan.
Lenders operate according to national guidelines for responsible lending, meaning your credit score doesn’t influence your chances of qualification, but your ability to repay the loan does.
Regulations:
Pawn shop lenders operate by various regulatory requirements in different states, but you’ll typically just need to provide some basic documents to use one. There are no rules about affordability or consumer welfare with a pawn broker loan.
All cash loan lenders need to have an Australian Credit Licence which is issued by the Australian Securities and Investment Commission. If they fail to adhere to responsible lending guidelines and play by the rules, they face substantial fines or prosecution.

See how pawn shop loans can help you

Online loans are faster than a pawnshop

Don’t leave your home. Check in with Savvy, get pre-approved and connect directly with the lender, then apply online and get funded the same day.

Online loan lenders are licenced

Borrow only from fully licenced payday lenders and get approved based on your ability to repay the loan without hardship.

Apply from anywhere, any time

No need to stop what you’re doing. If you’ve got an internet connection and a smartphone, tablet, or computer, you can find a lender and get a cash loan application going.

Qualify for an online loan in sixty seconds

You just can’t get faster funds. Just fill out Savvy’s quick form so we can locate your best options, hit send, then get conditional cash loan approval in one minute flat.

Repay a cash loan your own way

Borrow for how long you need. You can choose to repay over terms ranging from 16 days to two years.

Budget for online borrowing easier

Why risk your valuable possessions? Budget to pay fixed, capped cash loan fees for a finite period that suits your means with no security required.

Why apply for a small loan with Savvy?

Savvy explains: What you’ll need to apply for a cash loan

Got more questions about pawn broker loans? Check the FAQs

How do I apply for pawn broker loans?

You’ll need to take an item to the nearest branch and get a valuation. Then, the pawnbroker will tell you what they’re prepared to advance based on the value of your possession. The pawn broker will require one-hundred points of ID and proof of address like a recent utility bill. You’ll also need to fill out a form stating that you are the owner of the goods you intend to pawn.

What are the benefits of a pawn shop loan?

If you have a high-value item that you can afford to lose for less than market value, pawn broker loans offer a fairly straightforward way to access funds relatively quickly – but using a pawnbroker loan can get very expensive.

Do cash loan lenders and pawn brokers run a credit check?

When you use a pawn broker loan, there are no credit checks or affordability concerns like with a responsible cash loan lender – but that means there’s a distinct lack of protection, too. Small personal loan lenders check your credit report to make sure you’re not over-extending financially. It’s worth noting that you can apply for a cash loan with bad credit – lenders only look at your report to identify current borrowing levels and check for past problems with similar loans – not so much to check your credit score.

What happens if I don’t pay back my pawn broker loan on time?

Pawn brokers use your asset as security for your borrowing, so if you fail to repay a pawn broker loan by the agreed date, your item will be put up for sale in the pawnbroker’s shop. At that time, you’ll still have the option to repurchase the item unless a customer decides to buy it first. When that happens, it’s usually for a sum closer to market value than what the pawn broker advanced to you.

Can I sell items to a pawn broker?

In most cases, yes. Pawn shops will buy certain items like electronic devices and sell them on the premises.

What can I use to get a pawn broker loan?

There aren’t many limits on what a pawn broker will accept as security for your loan. People use furniture, household goods like TVs and refrigerators, cars, motorcycles, and even phones and computers.

What’s the best way to find a cheaper loan?

The quickest and simplest way to find and qualify for a cash loan is to check in with Savvy. We use smart digital systems to immediately identify your best borrowing options by comparing your profile with the qualification requirements of dozens of specialist lenders. Once we’ve done that, we’ll connect you directly to the loan providers portal, and you can apply online in minutes.

Can I pay my cash loan off early, like with a pawn shop loan?

You can. There are no fees or penalties for repaying payday loans early. You just call up your lender and make arrangements to pay it off in full – typically using BPAY.

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Disclaimer:

The information on this website is of general nature and does not take into consideration your objectives, financial situation or needs.

For loans between $2,050 and $5,000, the APR is between 21.24% (minimum) and 48% (maximum) per annum. Comparison rate of 65.4962%. Minimum term is 16 days and maximum term is 24 months. The cost of the loan is a $400 establishment fee and monthly interest charged on the amount borrowed. For example, a loan of $3,000 over 3 months with an APR of 48%, (comparison rate of 65.4962%), will have an establishment fee of $400, monthly repayments of $1,225.20. Total repayments of $3,675.60 and total interest payment of $275.60.

Warning: A comparison rate indicates the true cost of a loan. Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.

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