Mary is a nurse from gold and jewelry pawn shop who needs some extra cash to help her son pay for his wedding ring. She decides to take a jewelry pawn loan from Diamond Banc and can choose the length of time she wants to repay the principal balance, as long as it’s within the state maximum limit. She can also opt to extend her loan for as many 30-day periods as she wants.

A pawn shop loan is one of the fastest and easiest ways to get short-term funds without impacting your credit score. Customers bring in items they own like jewelry, collectibles and tools and receive an offer based on the value of the item. After the time period expires, the customer can return to redeem their merchandise and pay the pawnbroker back, or the shop will sell it on their behalf.

Top-Rated Pawn Shops: How to Spot the Best in Your Area

Pawnbroker fees and interest rates vary by state. In states such as Pennsylvania, strict regulations protect borrowers from excessive interest charges and allow pawnshops to provide better deals for consumers. However, in other states such as Georgia and Indiana, higher rates can turn a pawn shop loan into an expensive burden.

To compare pawnshop loans, it is best to use the annual percentage rate (APR) calculation. This measure includes all fees, so it provides an apples-to-apples cost comparison across all types of loans and credit cards. To calculate APR, simply plug in the fee, the loan amount and the repayment term to find a true representation of the total cost.