The answer to those questions depends on where you go for the loan. Pawn shops in Massachusetts, for example, offer much lower rates than other surrounding states. Why the difference? Loan interest rates are set by local state or city governments and can vary greatly from state to state. You can pay as little as 2-3 percent, or as much as 20-25%! In addition, the length of time for the loan can vary from one month to 3, 4 or even 6 months. Empire Loan’s pawn loan rates will give you an idea of how it works.
Location Makes a Difference
Empire Loan’s pawn shops in Massachusetts offer a monthly interest rate of 3%. In Rhode Island, the rate is slightly higher at 5% per month. If you go just over the border into New Hampshire, the rates jump up to as much as 20% per month for a one month loan. This means that a $100 pawn loan in New Hampshire will cost you $20 for 30 days. In Massachusetts, even with an appraisal fee, that same $100 loan would cost you just $11 — almost half as much.
Consider the Length of the Loan
The second thing to consider is how long the terms of the loan are. In Rhode Island, loans are 1-3 months, while in Massachusetts the loan terms are 4 months. The terms of a loan refers to the length of time you can borrow before you have to make a first payment. You do NOT have to make a payment until the end of the loan period.
Some pawn shops tell customers that they need to come in and pay their interest monthly. This is actually against the law in the states where Empire Loan operates. With a $100 loan at Empire Loan of Rhode Island, there’s no need to make a payment for 3 months (90 days). At that time, you will pay $118 to redeem the loan or just $18 to renew the loan for another 3 months. What about Massachusetts? For the same $100 loan in Massachusetts, you won’t have to make a payment for 4 months, at which point you will pay $120 to redeem the loan and reclaim the item, or just $20.00 to renew the loan for another 4 months. So how does it work in New Hampshire? That same $100 loan in New Hampshire will cost you $120 after just 30 days — at which point you may be in danger of having the item foreclosed. If you keep renewing the loan in New Hampshire, you may end up paying back double the amount you borrowed in the first place!
If you need a fast cash pawn loan, Empire Loan’s pawn shops in Massachusetts and Rhode Island just may be worth the trip!