Pawnshop loans often use predatory tactics when lending. These tactics may result in loan terms and fees that are illegal. For example, the Consumer Financial Protection Bureau sued pawnshops that were charging military families higher interest rates than they were allowed to.
No, a pawnshop loan is a secured loan. You offer up collateral in exchange for the loan. If the loan isn’t paid back, you will lose your item, but your credit score won’t be impacted.
Pawnshop loans have high interest rates and fees, which can make them difficult to pay back. Additionally, the amount of the loan is typically lower than the value of the collateral.
