What if you desperately need $1,000 to get through the semester? You could pawn your TV and stereo equipment to get quick cash, but it won't be enough. Pawnshops usually pay only a fraction of an item's value. Your most valuable possession is your car and you've heard that a local pawnshop makes car title loans. Beware-you'll only get a small portion of your car's value and you could lose the car.
Here's how these loans work: Your car is worth $5,000. The pawnshop gives you $1,000 in exchange for the title to your car. You agree to pay the loan back in six months and the pawnshop charges you 10% interest a month on the loan. Your $1,000 loan costs you: