If you’re in need of fast cash but don’t want to go through a bank or deal with a credit check, a pawn loan might be the solution for you. But before you bring in that gold ring or diamond watch, it's essential to understand how interest rates and fees work in pawn loans. Let’s break it down so you can borrow with confidence.
A pawn loan is a short-term, collateral-based loan. You bring an item of value—like gold jewelry, electronics, or luxury watches—to a pawn shop. The pawnbroker evaluates the item and offers you a loan based on its value. If you accept the offer, the shop holds the item as collateral until the loan is repaid.
One of the biggest advantages of pawn loans is that they don’t require credit checks. Plus, if you’re unable to repay the loan, your credit isn’t affected. Instead, the pawnshop simply keeps the item and sells it to recover the loan amount. No collections. No penalties.
Interest rates for pawn loans vary by state. In Florida, for example, pawnbrokers are legally allowed to charge up to 25% interest per month. That may sound high, but many reputable pawn shops charge far less.
At Sunrise Pawnbrokers Inc., we pride ourselves on transparency and fairness. That’s why we only charge 6% `to 7% interest per month—a significantly lower rate than the state maximum. We want our customers to be able to reclaim their items without being burdened by excessive fees.
In Florida, a standard pawn loan term is 30 days, with a 30-day grace period. That gives you a total of 60 days to repay the loan plus interest. If you’re unable to pay it off within that time, you have the option to renew the loan by paying just the interest, effectively restarting the clock for another 60 days.
Besides interest, there may be small service or storage fees, but these must be clearly stated in your loan agreement. At Sunrise Pawnbrokers Inc., we keep fees minimal and transparent so there are no surprises.
Let’s say you pawn a gold necklace for a $200 loan:
If you choose to renew, you pay $14 and get another 30 days before paying back the full $200.
Pawn loans can be a smart, flexible way to get the cash you need—as long as you understand the interest rates and fees involved. By borrowing responsibly and working with a trusted shop like Sunrise Pawnbrokers Inc., you can use your valuables to your advantage without long-term consequences.
Got questions about pawn loan terms or interest rates? Visit us in Fort Lauderdale or give us a call—we’re here to help!