There’s more to a professional pawn shops nearme than meets the eye, especially if you’re a regular viewer of the hit reality show “Pawn Stars.” You can go into one of these places to buy something or to sell your own items outright. But you can also walk out with a loan—which is a little different than a credit card or bank loan. And it’s important to know how the process works so you can make a wise decision.

When you bring an item to a pawn shop, a pawnbroker appraises it and offers a loan, generally 25-60% of the item’s resale value. He or she records your name, address and a description of the item on a ticket. They may also test the item for authenticity, such as a jewelry or a TV, and note the serial number if there is one. Most pawnshops are licensed and must comply with state laws including the Equal Credit Opportunity Act, the Truth in Lending Act and regulations on how much interest can be charged.

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The pawnbroker keeps the item until the customer pays back the loan plus interest—which can be as low as 10% per month in some states, but can be higher. He or she is allowed to sell the item for a profit, and may also trade it in for another item. Local laws often require pawnbrokers to cooperate with police on a daily basis, to report any stolen goods.