One of the questions that I will typically see asked is “How long are pawn shop loans” and I really wish that there was a super easy way to answer the question, but unfortunately that is not the case.
You see, there are a ton of factors at play when attempting to determine the length of any given pawn loan in any given state or area.
The first problem is that pawn shops are regulated on federal, state, and local levels and each of these laws can vary exactly how a pawn shop operates.
It would be much easier if all pawn shops were regulated on just one, federal level, but since there is no way that a state or city is going to give up that kind of control over their local businesses and economy, don’t plan on that happening any time soon.
With this in mind, the shortest pawn loan that I know of is 30 days. The longest that I know of is 120 days, but there may be longer ones that I know of.
That having been said, this length of time is the state minimum before a pawn shop can forfeit an item and resell it assuming that it was never paid on, or ‘Renewed.’
Extending, Renewing, & Rewriting Pawn Loans
While there are minimum state holding periods for pawn loans, and sometimes minimum city or county regulations as well – pretty much every pawn shop will offer you the ability to extend the loan through some kind of payment process.
This just typically involves you paying the back-due interest charges on the loan, which are often very affordable.
For instance, in Ohio, the interest rate is 5%+$4 in storage a month. If you made a $50 loan, it would cost you $6.50 a month.
Ohio also has a 90 day holding period before the items in the pawn are forfeit. If you came in on the 89th day and paid the three months of interest and storage ($19.50), you would extend the loan for another 90 days.
This allows the pawn loan to go on for a longer period of time than the initially stated 90 days that are required by state law.
However, in other states, you may have to rewrite the entire loan, which means that the loan will get a new loan number and may be subject to any fees associated with new loan origination. This is something that is completely depend on the state and local laws that govern what a pawn shop can charge their customers for their loans.
Can Pawn Shops Forfeit Loans Early
One big fear that I hear a lot of potential pawn shop customers facing is the idea that a pawn shop will forfeit and sell their items before the state law says that they are permitted to do so.
I will tell you that pawn shops are heavily regulated and frequently inspected to ensure that they are operating within the guidelines of the laws in their area.
There’s never been a pawnbroker that I’ve met that would forfeit their customers loans early. The risk to their business would be huge as the state would likely ban their license to operate.
In addition, pawnbrokers are ethical business owners. They aren’t out there to steal items from their customers and in fact, most pawn shops would prefer that you come back and get your items as opposed to forfeiting them.
The reason is that if you should need to make a loan in the future, it’s better for you to have an item that the pawn shop is already familiar with then potentially bringing in something else completely foreign to them that they may or may not be able to help you with.
The Easiest Way To Determine The Length of A Pawn Loan In Your Area
If you want to know how long pawn loans are good for where you live, the easiest way to do that is to simply call a local pawn shop and ask.
They are going to have no problem telling you over the phone and will probably be glad you asked in advance.
You can find local pawn shops by going to Google.com and searching “Local Pawn Shops” or “Pawn shops in my area” and just picking one or two to call.