How a pawn shop loan works
You leave an item, such as gold jewellery, with a pawn shop and receive a loan against it. There are no monthly payments. To get the item back you pay the loan plus the finance charge by the due date, and some shops let you extend the loan by paying the charge so far.
Pawn loans in the US are mainly regulated by individual states, so the maximum charges, the term and what happens to an unredeemed item differ from state to state. Read your pawn ticket for the actual terms. The calculator takes the rate and term from your ticket rather than applying a state rule.
Charges are often quoted per month. The calculator accepts a monthly or a yearly rate, works out simple interest by default and can add unpaid interest to the loan each month if your ticket does that. It adds no fees, so include any separate fee in the finance charge yourself.
Worked example
Borrowing $200 for 3 months at 5% a month on simple interest costs $30.00 in finance charges, so you pay $230.00 to reclaim the item. Expressed as a simple yearly rate that is 60.00%, and the effective annual rate is 74.90%.
If the charge were 10% a month added to the loan each month, the same loan would cost $266.20 after 3 months. With an item valued at $600 and a 50% limit, a loan of up to $260.87 fits once the amount due is counted.
To estimate what a pawn shop might lend on gold, use the pawn shop gold loan amount calculator.
Before you take a pawn loan
Ask for the due date, the total to pay on that date, what an extension costs, 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.
The pawn shop loan vs personal loan calculator compares the cost side by side.
Inputs for the pawn shop single payment loan calculator
Loan amount
The amount the pawn shop lends against your item.
Interest rate
The finance charge rate on your ticket. The rate shown is only an example.
Rate is quoted
Choose per month or per year to match your pawn ticket. Many shops quote monthly.
Term
The months until you reclaim the item and pay, from 1 to 60.
Interest is worked out
Simple interest is rate times time. Compounded monthly adds unpaid charges to the loan each month.
Value of your item
What the pawn shop values the item at, as resale or melt value.
Lender's loan-to-value limit
The most the shop lends as a share of that value. Use the offer you were given.
CALCULATOR QUESTIONS
Pawn shop single payment loan calculator questions
How is a pawn shop loan repaid?
In one payment, the loan plus the finance charge, when you reclaim the item. Some shops allow an extension if you pay the charge.
What if I do not reclaim my item?
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 follows federal rules and counts fees. This figure uses only the rate 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.