Comparing a monthly charge with a yearly rate
A pawn shop loan is usually repaid in one payment when you reclaim your item, with the finance charge quoted per month. A personal loan is repaid in equal monthly instalments, with the cost quoted as a yearly rate and often an origination fee taken from the loan. The two are quoted in different ways, so the headline numbers cannot be compared directly.
The calculator puts both on the same footing. It works out each loan's total cost and its effective annual rate from the cash you receive and the payments you make, including any fee. Enter the pawn charge per month or per year as your ticket shows it.
The personal loan rate here is the yearly rate you enter, charged as one twelfth each month, and the fee is a percentage of the amount taken from what you receive. An advertised APR may include more costs, so check it against your lender's quote.
Worked example
Borrow $500 for 6 months. A pawn loan at 5% a month, repaid in one payment, costs $150.00 in finance charges, so you pay back $650.00. A personal loan at 15% a year repaid in six equal instalments costs $22.10, a payment of $87.02 a month. The personal loan costs $127.90 less in total.
Fees change the picture. With a 2% fee on a pawn loan at 3% a month repaid in six instalments, and a 5% origination fee on the personal loan, the pawn loan's effective annual rate is 53.10% and the personal loan's is 38.80%, so the personal loan costs $16.69 less in total.
To look at a single-payment pawn loan on its own, use the pawn shop single payment loan calculator.
Things a number does not show
A pawn loan is secured on your item, so you can lose the item if you do not return, and the rules differ by state. A personal loan is unsecured but is affected by your credit and income, and missed payments can harm your credit report. Compare how each one treats a missed payment before you borrow.
Inputs for the pawn shop loan vs personal loan calculator
Amount to borrow
The same amount for both loans, so the costs compare fairly.
Term
The months you take to repay, the same for both loans.
Pawn loan interest rate
The finance charge rate on your pawn ticket. The rate shown is only an example.
Pawn loan rate is quoted
Choose per month or per year to match your ticket. Many shops quote monthly.
Pawn loan is repaid
All at the end, interest monthly with the loan at the end, or in equal monthly instalments.
Pawn loan fee
A fee as a percentage of the amount, taken from what you receive.
Personal loan interest rate (per year)
The yearly rate on your personal loan quote. The rate shown is only an example.
Personal loan fee
An origination fee as a percentage of the amount, taken from what you receive.
CALCULATOR QUESTIONS
Pawn shop loan vs personal loan calculator questions
Is a pawn shop loan cheaper than a personal loan?
Usually not, because pawn charges are high and quoted monthly. Compare the effective annual rate of each.
Why compare the effective annual rate?
It matches the cash you receive to all the payments you make, so a monthly charge and a yearly rate can be compared fairly.
Does a pawn loan affect my credit report?
A pawn loan is secured on your item, so it usually does not rely on your credit report. Ask the shop what it reports.
Does the calculator use state limits on pawn charges?
No. State rules differ, so it uses the rate and fee from your ticket.