Pawn Loan, Payday Loan, Car Title Loan

What’s More Inexpensive? A Payday Loan, Pawn Loan or Car Title Loan?

Compare short-term loans in San Diego before you take a decision

“Sometimes you’re flush, and sometimes you’re bust,” said Johnny Depp in a famous movie. And when we are pressed for money, all neon signs come to mind: A Payday Loan, Pawn Loan, or a Car Title Loan.  However, not all loans are created equal, and it’s better to compare loan options before the landlord comes knocking on the door…

But first things first…

Here’s a basic concept for understanding any loan:


What is an APR?

The APR is the Annual Percentage Rate. It includes fees paid to the borrower. It is a more exact measure of the cost of a loan than the interest rate.

Where you live matters

Short-term loan laws and rates vary by State. This blog discusses loans in California.

The Payday Loan

Many lenders offer a Payday Loan in San Diego, attracting clients with phrases such as “instant loans” and “fast cash loans.” Payday Loans are also known as “payday advances”, “cash advances,” and “payday advance loans.”

300-460% APR.

Interest Rates

Per California law, the maximum interest rate for a Payday Loan is 15%

How does the Payday Loan work?

  • You give the Payday Loan agent a post-dated personal check for the amount you wish to borrow plus the financing fee.
  • The lender gives you the loan; terms are usually 14 to 31 days.
  • At the end of the term, the lender collects the loan plus interest and fees with the post-dated check from your bank account.
  • In California, a payday lender cannot make you a new loan while an existing loan is outstanding. They are not required to provide you an extension.

What happens if I can`t make the Payday Loan payment at the end of the cycle?

  • If you default on your payment, the agency will usually share this information with payday loan companies nationwide.
  • While Payday lenders don’t let the credit bureaus in on a customer’s default, they may pass your account over to a collection agency. Collection agencies do report to the credit bureau*.
  • Plus, not having enough funds in your account may result in overdraft fees from your bank.

Bottom Line on a Payday Loan:

  • Payday loans cause hardships. Their high-interest rates make it difficult to come up with the payment at the end of the cycle.

You can read more about Payday Loans in California here.

The Pawn Loan

You can find pawn shops in many areas of San Diego: City Heights, Encanto, El Cajon, National City and Chula Vista, and other places.

36% APR

Interest Rate:

Per California law, the maximum interest rate for pawns is 3%.

At CashCo Pawn Shops in San Diego, pawn interest rates range from 0% to 3% per month, depending on whether you are a first timer, returning, or Active Duty customer.

How does the Pawn Loan work?

  • You bring an item of value to the pawn shop to be evaluated.  The item could be a gadget, electronics, tools, sports equipment, musical instrument, and of course gold and jewelry. See a full list here
  • The pawn loan agent will offer you a loan based on the assessed value of the item, and if you accept it, a ticket is written, specifying the term of the loan*.
  • The item is stored in a super-secure location.
  • By the end of the pawn loan term, you’ll pay the loan plus interests and fees, and you’ll retrieve your item, as 80% of pawn customers do. You could also extend the loan as many times as you wish. Storage and writing fees may apply.

CashCo is the only pawn shop in San Diego to offer flexible pawn terms, from 4 to 6 months.

What happens if you can’t make the payment?

  • If you can’t pay the pawn loan at the end of the term, then the pawn shop will keep the item for good.
  • The positive thing about pawn loans is that failure to pay is never reported to credit bureaus or collection agencies. It has no further consequences.

Bottom Line on a Pawn Loan:

Lower interest rates and flexible loan options for a Pawn Loan, as compared to any Payday Loan or Car Title Loan, mean:

  • A greater chance of paying the loan back on time
  • A bigger chance of retrieving the item
  • More money in your pocket.

While defaulting on the payment may mean the loss of the item, it also means the end of the debt. No more interest, no delinquent records, no collection agencies coming after you. In other words, peace of mind.

Learn more about pawn loans here

APR 300-460% APR 250-350% APR 36% APR
Interest Rate** 15% Uncapped** 3%
Bank Account Needed Yes No No
Employment Needed Yes No No
Car Ownership Needed No Yes No
Can it End up in Collections Yes No No
Term 14-31 days 1-12 months 4-6 months

**Maximum rate allowed per California Law

***Current California State Law does not limit interest rates for consumer loans of $2,500 or more.

The Car Title Loan

Here in San Diego, a car title loan also known as “auto title loans” and “auto pawn loans.” You can find “car pawn shops” in El Cajon, Chula Vista, and many other areas.

APR 250-350%

Interest rate:

20-30% per month

How they work: 

  • You take your vehicle to the auto title lender along with the clear title.
  • The auto title agent will determine your vehicle’s value and offer you a loan for a percentage of the car’s value (usually around 25 to 30%).
  • At the end of the term, if you can pay the loan plus fees and interest, you´ll retrieve your car. Loans can usually be extended.

What happens if I can’t make the car title loan payment?

  • If you are unable to pay the fees and the accrued interest by the end of the loan term, you will lose your car.

Bottom Line on a Car Title Loan:

  • A car title loan is considered a “last-resort” option because the loan payment usually eats up a large portion of the borrower’s monthly income.
  • According to an important study, Car Title Loans often exceed the customer’s ability to repay.
  • In San Diego, losing your car may compromise your ability to get to work, and provide an income for your family.

Read this California government advisory before entering a car title loan.

Have a Pawn Loan question? 

Call: 619-280-7296

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Looking to get a quote on any item to pawn or sell?

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CashCo Pawn Shop and any third parties or individuals appearing in this article are not specifically recommending any particular financial product or service. The information shown is for illustrative purposes only and is not intended as financial, legal or tax planning advice. Unless specifically identified as such, the individuals interviewed or otherwise listed in this piece are neither clients, employees nor affiliates of CashCo Pawn and the views expressed are their own. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation.Promotions are subject to change without notice, conditions apply, check with the store for participation rules.