Pawn Loan Cost Calculator: Total to Redeem, Finance Charge and APR
Calculate what it costs to redeem a pawn loan: the monthly finance charge, one-time and storage fees, the total payoff month by month, the APR (Truth in Lending method), the cost per $100 borrowed, and when redeeming would cost more than your item is worth.
How it works
Monthly charge = loan × monthly rate + flat storage fee · Finance charge = monthly charge × months + one-time fees · Total to redeem = loan + finance charge · APR = (finance charge ÷ loan) × (12 ÷ months), so with no extra fees APR = monthly rate × 12
A pawn loan lends you cash against an item you leave with the shop as collateral. The shop charges a finance charge for each month (usually each 30-day period), quoted as a percentage of the loan, and some shops add one-time set-up fees or a flat storage fee. To get the item back you repay the loan plus every charge that has built up. Most shops count any part of a month as a full month. Under the federal Truth in Lending rules, a single loan repaid in one payment has an APR equal to the finance charge divided by the loan, times the number of such terms in a year. A one-month pawn at 20% a month is therefore 20% × 12 = 240% APR. Fixed fees push the APR higher, especially on short loans. There is no credit check and no personal liability: if you do not redeem, the shop keeps the item and you owe nothing more. That is also the main risk, because the item is usually worth more than the loan. Enter the item’s value under More options to see when redeeming would cost more than the item is worth. States set the maximum charge, the minimum term and the grace period before an unredeemed item can be sold, so these differ by location.
Worked example
With the defaults, a $150 loan at 20% a month redeemed after 1 month has a finance charge of $150 × 20% × 1 = $30, so you pay $180 to get the item back. The APR is ($30 ÷ $150) × (12 ÷ 1) = 240%, and the cost is $20 per $100 borrowed. Keep the loan 3 months and the charges triple to $90, making the payoff $240.
Sources: Alabama State Banking Department: Calculating APR for pawn transactions · 12 CFR Part 1026, Appendix J (Regulation Z annual percentage rate computations), Cornell LII
Frequently asked questions
What happens if I don’t repay a pawn loan?
After the loan term and any grace period required by your state, the shop keeps and sells your item. There is no further debt and nothing is reported to the credit bureaus, but you lose the item, which is often worth more than the loan.
How is the APR on a pawn loan calculated?
For a loan repaid in one payment, APR = (finance charge ÷ loan) × (number of terms in a year). A one-month pawn at 20% is 20% × 12 = 240%; at 25% it is 300%. One-time fees are part of the finance charge, so they raise the APR.
Can I extend or renew a pawn loan?
Many shops let you renew by paying only the charges due. That keeps your item, but the loan amount does not go down and a new month of charges starts, so renewing several times can cost more than the item is worth.
Can I pay off a pawn loan early?
Usually yes, and redeeming earlier means fewer monthly charges. Because most shops charge a full month for any part of one, redeeming a few days into a new month costs the same as redeeming at its end.
How much will a pawn shop lend?
Shops lend a fraction of what they expect to resell the item for, so the loan is usually well below its retail value. Entering the item’s value shows your loan-to-value and how long you can carry the loan before redeeming stops being worth it.
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Educational estimate, not financial advice. Pawn charges, fees and terms are set by state law and each shop; your pawn ticket shows the exact finance charge and APR.