We’ve all been pawn shop cash loans : payday is weeks away, and the credit cards are already overdue. You might think it’s worth taking that pearl necklace from grandma to a pawn shop for some quick cash, but you should consider the risks carefully. Pawn shops offer fast cash loans without a credit check or income verification and they accept a variety of items as collateral. But these loans come with high interest rates and may not be the best option for those in need of financial help.

Pawnshops are essentially personal loan providers that make money by lending or reselling second-hand items. When you bring an item into a pawnshop for a loan, the pawnbroker will appraise it and give you an amount to borrow based on its value. The pawnshop will hold the item until you pay back the loan (plus any fees and interest) or forfeit it.

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The pawnshop’s risk in lending you money is lessened by the fact that it has the right to sell your item in order to recover its costs. This is different than many no-credit-check loan lenders, which can hurt your credit score if you don’t pay them back.

The rate you’ll be charged for a pawn shop loan depends on how much the item is worth, how quickly you pay it back, and the pawnshop’s margin targets for each type of merchandise. Some pawnshops also charge a fee for storage, insurance and loan renewal, which can add up to an annual cost of triple digits or more.