Best pawn loans offer consumers a quick, convenient and confidential way to meet a short-term cash need without racking up debt or risking their credit. They typically provide loans based on the value of the item offered as collateral, and if you fail to repay the loan amount plus fees and interest, the item may be sold. Pawnshops do not report to credit bureaus, so you won’t risk a negative impact on your credit score and you will not be harassed by debt collectors.

However, the biggest downside of pawning is that it is expensive. Consumer advocates consider an APR of 36% to be the upper limit of affordability for a pawn shop loan, and it can be difficult to break the cycle of borrowing.

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To avoid the high cost of pawning, it’s important to only pledge items you can afford to lose. It also helps to build an emergency fund and a budget so that you can pay for unexpected expenses in the future. If you need help building a budget or finding ways to save, consider working with a non-profit credit counseling agency. They can often provide basic budgeting and money management services for free or at a reduced cost.