Although many people consider pawn shop services to be the most preferable, bank services could be more advanced and secure. Usually, many customers of pawn shops are those unemployed. This means they are not legible for any loan in a bank whatsoever. They can only afford petty cash loans as those given by these shops. The users of the shops could have a negative influence on the people because they comprise people who at any time, they have had a bad experience with the traditional banks. Either, they had an overdraft or penalties. The pawn shops have a few or no formalities accompanying their services. These shops have quite a number of disadvantages, some of which include the following: 

Items given may have been stolen 

Since these shops receive items from any person who approaches them for a loan, they may end up receiving items which have been stolen. This is why many people term them as vicious. A person who is certain that the shops will accept their items regardless of how the person obtained them, will continue exchanging them with pawn shops. This will lead to increased cases of theft. This is because, not all shops are legitimate enough to check the validity and ownership of the item. 

They do not offer large and long-term loans 

Most of these pawn shops are local stores that are started by unemployed people. One can be quite assured that no reasonable amount of loan can be secured from them. They cannot give long-term loans due to their financial capabilities. For this reason, many people prefer to get loans from banks. 

They offer extremely low buying prices 

Pawn shops buy a certain item at a lower price which denotes a certain fraction of the marked price of the item shops that pawn This is a high exploitation of the item holder. This is because, some people when they are faced by an adverse situation, they lack instant market to sell their items, and hence opt to sell them to the pawn shops indirectly in the name of obtaining a loan. These are needy people who would otherwise have sold their items expensively. Pawn shops then take advantage of the situation at hand. 

It is better for a person who is legitimately in need of a loan to approach a bank and apply for the loan instead of surrendering one’s items to a pawnbroker at an exploitatively cheap price. This is to avoid selling all the items in the house which is very possible in some situations.