If you need quick cash and have no other options, a loan at a pawn shop may seem like the obvious solution. But it’s important to weigh the pros and cons before you make a decision.

Get a loan at a pawn shop offers loans based on an item’s assessed resale value, usually much lower than its original purchase price. Most pawnbrokers offer between 25% and 60% of an item’s current market value. Common items include jewelry, musical instruments and electronics. Luxury items, such as designer handbags and rare coins, can command high premiums due to their brand and provenance.

Get a Loan at a Pawn Shop: What You Need to Know

When you bring an item into a pawn shop, the pawnbroker will give you a pawn ticket that details your terms. If you pay back the loan amount plus interest by the end of the agreed upon term, you’ll get your item back. If you don’t, the pawn shop keeps your property and can sell it on its own.

While most states have strengthened pawn shop loan regulations in recent years, there are still reports of pawn shops charging over-the-allowed annual percentage rates (APR), asking for illegal contracts, and deceiving customers. If you’re in a financial pinch, consider other loan alternatives that report on-time payments to the credit bureaus and don’t put your family’s valuables at risk.

A MoneyLion Credit Builder loan is a great alternative to pawn shop loans. We offer competitive rates, monthly credit reporting and Lion’s Share perks that other lenders can’t match.