When you hear the term “pawn shop,” you might imagine a rundown storefront sandwiched between a check-cashing outlet and a mini-mart with a dusty display case filled with jewelry, firearms and other items. But in addition to acting as secondhand retailers, pawn shops can offer collateral loans without the need for credit checks. In fact, a pawn shop loan is one of the few ways to access cash quickly if you don’t want to take out a personal loan or get a payday advance from a paycheck lender.

How do pawn loans work?

When you how pawn loans work something at a pawn shop, the pawnbroker gives you money for it based on its resale value. You have a set amount of time, usually about 30 days, to repay the loan plus interest in order to reclaim your item. If you don’t, the pawnshop keeps your item and sells it to recover its costs.

Pawn Your Jewelry: A Quick Way to Get Cash

This is a high-cost form of lending and should be used only as a last resort when you are in an emergency situation. In most cases, it’s better to try to resolve your financial woes by addressing an underlying money management problem. This could include seeking counseling, adjusting your budget or finding alternative sources of funds. A higher credit card limit or a cash advance may also be better options than pawning. But if you do decide to use a pawnshop, read the fine print carefully and be sure you fully understand how these loans work before moving forward.