How paying a pawn loan off early saves money
Where a pawn shop loan is a single payment due when you reclaim your item, finance charges build up each month on the loan. Paying part of it off early cuts the loan, so less builds up in the months that follow. Paying all of it early ends the loan and the charges on that day.
Pawn loans in the US are subject to state law, so the charges and what happens to an unreclaimed item differ from state to state. Your pawn ticket sets out how early payments are handled and whether the shop refunds unused charges. The calculator charges whole months of simple interest, so use the figure on your ticket or ask the shop for a payoff amount.
The calculator can also show a loan where interest is paid each month, or one repaid in equal installments, if that is how yours works. Pick the repayment type that matches your ticket.
Worked example
On a $500 pawn loan at 5% a month for 3 months, the finance charges would be $75.00. Paying $200 off after 1 month cuts them to $55.00, which saves $20.00.
Paying off the whole $500 after 1 month ends the loan with $25.00 in finance charges, which saves $50.00 against waiting the full 3 months. The loan then lasts 1 month. With a 2% charge on a $200 part payment, the charge is $4.00 and the saving after the charge is $16.00.
To see what you pay at the end of a pawn loan and how it compares with the item's value, use the pawn shop single payment loan calculator.
Before you pay early
Ask the shop for a payoff amount for the day you plan to pay, whether part payments are accepted, and how they are applied to the loan or the charges. Check your state's rules on pawn loans if the figures differ from what the calculator shows.
Inputs for the pawn shop early payoff calculator
Repayment type
One payment at the end is the default for a pawn loan. Pick another if your ticket differs.
Amount you owe
The loan still to repay, not counting interest that is yet to build up.
Interest rate
The finance charge on your ticket. The rate shown is only an example.
Rate is quoted
Choose per month or per year to match your ticket.
Months left
How many months remain until the loan is due, from 1 to 60.
Extra each month
Money paid off the loan each month on top of what is due. Enter 0 for none.
One-off lump sum
A single part payment. An amount that covers the loan pays it off. Enter 0 for none.
Lump sum paid after
Months from now. Enter 0 to pay it today.
Prepayment charge
A charge as a share of what you prepay. Enter 0 if your pawn shop has none.
CALCULATOR QUESTIONS
Pawn shop early payoff calculator questions
Can I pay off a pawn shop loan early?
Ask the shop, and read your pawn ticket, which sets out the terms. You can also ask for a payoff amount.
Do I pay less if I pay early?
If your ticket charges month by month, paying early cuts the finance charge. Whether a shop refunds charges already due is set out in your ticket.
How do I pay off the whole loan early?
Enter the full amount you owe as the lump sum and the number of months from now. The calculator then shows the saving against waiting for the full term.
Does the calculator include state rules?
No. State rules differ, so the calculator uses the rate and term from your pawn ticket.