Is it necessary to pay interest on the pawn loan? Unfortunately, it is necessary to pay the interest. The pawn shop will be holding your item until you pick it up again, so they need the interest to help cover the fees for storing your item and processing your loan. There are typically two instances in which you will need to pay the interest on your loan so you don’t forfeit your item: when you are extending the loan or when you are picking up your item.
Extending the Loan
While you may have every intention of collecting your item and repaying the loan by the due date, sometimes it doesn’t quite happen that easily. If you need an extension on your loan, most pawn shops will grant this as long as you pay the interest on the item. You won’t have to pay the loan back in full at that moment, but you will need to pay at least the interest to be able to keep your item at the pawn shop. The interest will be higher if you extend the loan, but you will pay the current amount of interest each time you extend the loan.
Picking Up Your Item
If you’re ready to pick up your item, whether or not you’ve already extended the loan, you’re going to need to pay the interest. If you have extended your loan, you will pay the interest from the time you extended it until the time you collect the item. If you did not extend the loan, you’ll need to pay the interest from the time you obtained the loan until the time you pick up your item.
Is it necessary to pay interest on the pawn loan? Yes. You will be required to cover the interest before you can collect your item. Whether you need to pick up the item or you want to extend the term of the loan, you’re going to need to pay the interest to cover the costs of storing your item for you and loaning you the money. You can contact your pawn shop for answers to any questions you may have.