How a pawn shop gold loan works
You leave gold, such as a ring or a chain, with a pawn shop and receive a loan against it. Your pawn ticket says whether you make payments during the loan. To get the gold back you pay the loan plus the finance charge by the due date, and your state may let you extend the loan (Maine, for example, entitles you to one one-month extension on request).
Pawn loans in the US are subject to state law, so the maximum charges, the term and what happens to an unredeemed item differ from state to state: Oregon caps interest at 3% a month, for example, while Maine allows up to 25% a month on the first $500. The rates in the examples below are illustrations, not state limits. Read your pawn ticket for the actual terms. The calculator takes the rate and term from your ticket rather than applying a state rule.
State pawn limits can be stated per month, as in Maine and Oregon, so the calculator takes a monthly or a yearly rate. Interest is simple: the rate times the months, on the loan you took. Fees you pay separately can be entered as a processing fee. Some lenders instead take interest each month, or use equal installments, and the calculator can show those too.
Worked example
Borrowing $500 for 3 months at 5% a month in one payment means you pay $575.00 to reclaim the item, which is $75.00 in finance charges. As a yearly figure that is an effective annual rate of 74.90%, because the whole loan stays out for the whole term.
A pawn shop charging 10% a month on $200 for 6 months takes $120.00 in finance charges, an effective annual rate of 156.00%. Short loans at a high monthly rate look small in dollars but expensive as a yearly rate, so compare the yearly figure.
If the same $500 loan took the interest each month instead, you would pay $25.00 a month, then $525.00 in the last month with the loan. Adding a 2% fee to the one-payment loan brings finance charges and fee together to $85.00, and the effective annual rate rises to 89.62%.
To check a single-payment pawn loan against what the item is worth, use the pawn shop single payment loan calculator.
The pawn shop loan vs personal loan calculator compares the cost with an unsecured loan.
Before you take a pawn loan
Ask for the due date, the total to pay on that date, what an extension costs, any fee, and what happens to the item if you do not return. Compare the effective annual rate with other borrowing. The rate on a pawn loan can be high.
Inputs for the pawn shop gold loan calculator
Repayment type
One payment at the end is the default for a pawn loan. Monthly interest and equal installments are shown for comparison.
Loan amount
The amount the pawn shop lends against your item.
Interest rate
The finance charge from your pawn ticket. The rate shown is only an example, so enter your own.
Rate is quoted
Choose per month or per year to match your ticket.
Term
The months until you reclaim the item, from 1 to 60.
Processing fee
A fee as a share of the loan, taken from what you receive. Enter 0 for none.
CALCULATOR QUESTIONS
Pawn shop gold loan calculator questions
How is a pawn shop loan repaid?
In one payment, the loan plus the finance charge, when you reclaim the item, if that is what your ticket says. Your state may allow an extension.
What if I do not reclaim my gold?
The pawn shop keeps the item and can sell it. The rules, including whether you owe anything more, depend on your state and ticket.
Is the effective annual rate my APR?
Not exactly. A lender's APR is the interest rate plus the fees charged with the loan. This figure uses only the rate and the fee you enter.
Does the calculator include state limits on charges?
No. State rules differ, so the calculator uses the rate and term from your pawn ticket.