People visit pawn shops because they need money and they need it NOW! 

Here’s how it works: You bring in an item or items as collateral and the pawn shop loans you money. When you repay the loan plus interest, you get your items back. You can pay the loan back after the first month or negotiate to make monthly payments. In many instances, interest rates can be exorbitant.

If you don’t repay the loan, the pawnbroker keeps the collateral and puts the item or items up for sale.

Before heading out to the pawn shop, consider alternatives. Can you sell the items yourself? Can you get a no-interest or low-interest loan from family, friends, employer or credit union? Have you contacted the Consumer Credit Counseling Service in your area?

If the pawn shop is your only solution, look for one that is BBB Accredited.  And do your due diligence. Visit several pawn shops to get a feel for their merchandise and pricing. If you’re looking to pawn jewelry or other valuables, get an appraisal first. It will give you more power in the negotiating process. 

Pawn shops, as a rule, don’t want your furniture, antiques or other large items. If you must sell those, look for other outlets.

Keep in mind that, while there is room for negotiation on price, you will not get top dollar.  And make sure you understand all of the costs, including interest rate and other fees.

Tell us about your experiences with pawn shops!