A pawn is another term of a collateral loan. Pawnbrokers lend money based on the value of the collateral. When a customer pays back the loan, their merchandise is returned to them. A customer may also choose to surrender their collateral as payment in full. Pawnbroker may also offer extensions/ renewals.

Pawnbrokers offer consumers a quick, convenient and confidential way to borrow money. There are no credit check or legal consequences if the loan is not repaid. Pawn loans do not cause people to overextend credit or go into bankruptcy.

Loan amounts vary according to the value of the item. There is no minimum dollar amount allowed on a pawn transaction but the maximum amount may be set by state pawn laws. The loan amount is determined by factors such as demand and condition of the item.

Less than .001% of all pawned merchandise is identified as stolen goods. Customers must provide positive identification and a complete description of the merchandise. This information is then regularly transmitted to law enforcement, which dramatically decreases the likelihood that a thief would bring stolen merchandise to a Pawnbroker.

Yes, Pawnbrokers are governed by all of the major federal laws that apply to entities designed as financial institutions. The federal laws that regulate the pawn industry are Patriot Act, Truth in Lending Act, Equal Credit Opportunity Act, as well as Data Privacy and Safeguard of information as part of the Federal Trade Commission (FTC) Rules. Pawnbrokers that deal in firearms are regulated by the Bureau of Alcohol, Tobacco, and Firearms (ATF). Pawnbrokers may also be Federal Firearms License holders. States have regulated the pawn industry for decades, and most Pawnbrokers are licensed and regulated by local authorities as well.