A pawn broker is a person or business that lends money in exchange for personal property as collateral. This collateral is typically a valuable item, such as jewelry, electronics, or collectibles. The pawn broker holds the item until the borrower repays the loan, often with interest. In many jurisdictions, pawn brokers must be licensed or authorized to operate legally.
Pawn brokers operate within the realm of secured lending, which is a key area of financial law. They are often involved in civil law contexts, particularly in transactions related to personal property. Users may encounter legal forms related to pawn transactions, including loan agreements and receipts, which can be managed using resources like US Legal Forms.
Here are a couple of examples of abatement:
Example 1: A person brings a gold watch to a pawn shop and receives a loan of $200. They have 30 days to repay the loan plus interest to reclaim their watch.
Example 2: A borrower fails to repay the loan on time. The pawn broker may sell the watch to recover the loan amount. (hypothetical example)
| State | Licensing Requirements | Interest Rate Limits |
|---|---|---|
| California | Must be licensed | Maximum 2.5% per month |
| Texas | Must be licensed | Maximum 25% per month |
| Florida | Must be licensed | Maximum 25% per month |
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
| Term | Description | Differences |
|---|---|---|
| Pawn Broker | Lends money against personal property | Secured by collateral, typically short-term loans |
| Title Loan | Lends money against a vehicle title | Secured by vehicle ownership, often higher loan amounts |
| Payday Loan | Lends money based on future income | No collateral required, often higher interest rates |
If you are considering using a pawn broker, ensure you understand the terms of the loan, including interest rates and repayment timelines. If you need assistance, consider using US Legal Forms to access templates for pawn agreements. For complex situations, consulting a legal professional is advisable.
Browse our library of 85,000+ state-specific legal templates.
You can pawn a variety of items, including jewelry, electronics, and collectibles, as long as they have value.