Affordable pawn shop loans can offer quick cash, but at a price. Unlike payday or title loans, which can put your car up as collateral, a pawnshop loan typically requires you to bring in a valuable item to borrow against. And even though local laws dictate the maximum interest rates pawnshops can charge, you may end up paying multiple times what conventional loans typically cost.

It’s important to know exactly how much you’re paying in order to make an apples-to-apples comparison against other lending options. Pawnshops list their fees in the form of a per-month rate, but you can convert that rate into an annual percentage rate (APR) to see how much your loan really costs. For example, if you leave your grandfather’s gold necklace at a local pawnshop in exchange for $80, you’ll be expected to pay the store back its original loan amount plus interest and storage charges in 30 days or less.

Pawn Stores: What to Look for in a Trusted Pawn Shop

If you aren’t able to repay the loan within that time frame, a pawnbroker will extend your repayment period by adding on more interest and fees to your original loan balance. That can lead to a cycle of repeated extensions and repayments that ultimately result in you owing more than the item’s initial value.

If you find yourself in a financial pinch, it’s critical to look for better alternatives than pawn shop loans. A personal loan with a lower APR or a credit builder loan with a responsible repayment schedule is often a much more suitable borrowing option.