Let’s face it. Nothing is more upsetting than pawning your items and missing the deadline to repay your loan and pick them up. Or better yet, what if you sold your item to the pawn shop but had a sudden change of heart and want to get your stuff back now before it gets sold?
Things can happen. But regardless of why you want to know how long you have before a pawn shop sells your stuff, we hope this article will provide you with everything you need to know about pawn loan regulations and gain some clarity and peace of mind so you can get your items back in time should you find yourself in a sticky pawn situation.
What is a Pawn Loan?
First things first. A pawn loan is when a customer is advanced funds in exchange for pledging personal property that will be held in the pawnbroker’s possession until the customer redeems the merchandise within the agreed upon terms in the pawn contract. The amount of the loan is based on the value of the collateral. When a customer pays back the loan, including the fee, their merchandise is returned to them.
How much can be borrowed?
Pawn loans are ideal for people looking to borrow a few hundred dollars or less--- although some pawn shops will loan you money on boats, ATVs, and other motor vehicles for larger amounts sometimes up to $15,000. In the case of cars, SUVs or trucks, the title of the vehicle is used as collateral so the borrower will keep their car. Your item can be redeemed usually after a month when the loan amount plus the pawn fee are repaid.
How long do you have to pay it back?
Every state has different regulations regarding how long a pawn shop must hold their merchandise. These times can also vary depending on whether or not the customer pawns the merchandise or just outright sells the merchandise.
When the customer pawns the merchandise, they are borrowing money with the intent of redeeming the merchandise. In Alabama, the time limits are stated in the Alabama Pawn Shop Act, which was passed in 1992. According to section 5-19A-8 of the act, “A pawnbroker, any clerk, agent, or employee of a pawnbroker shall not make any agreement requiring the personal liability of a pledger or seller or waiving any of the provisions of this section or providing for a maturity date less than 30 days after the date of the pawn transaction.”
It also states in section 5-19A-4 that “any personal property pledged to a pawnbroker within this state is subject to the sale or disposal when there has been no payment made on the account for a period of 30 days past maturity date of the original contract and no further notice is necessary.”
What this means is that the term of the pawn loan has to be at least 30 days, but if you do not come and repay the pawn loan within 30 days, you still have another 30 days to pay the loan plus the fee before the pawn is considered forfeited and the item available for sale. Now, if you do come to get your item back between 31 and 59 days after the loan agreement date, you will need to pay 2 months of fees to get your item back.
If a pawn is forfeited, the borrower surrenders his or her item to the pawn shop to be placed up for sale and is no longer obligated to repay the loan. The borrower is also not responsible for any deficiency balance if the pawn shop sells his item(s) at a loss.
What happens if you miss your pawn deadline?
There are some pawn shops that will work with the customers and give them an extended time frame. Quik Pawn Shop, for instance, gives customers a 3 day grace period. Some pawn shops in Maryland allow only the 30 days before the merchandise can be sold. In New Jersey, on the other hand, state law requires that the merchandise be held for a minimum of 12 months. As long as you are within the allotted time frame for the particular state you are in, you can redeem the merchandise for the remaining principle and any interest or fees that are associated with the account.
What if you want to sell your items outright?
In Alabama, when a customer decides they want to sell their merchandise, the pawnbroker must maintain the merchandise for a minimum of 15 business days (which excludes Saturday and Sunday), before the merchandise can be offered for resale according to section 5-19A-5 of the Alabama Pawn Shop Act. This gives the consumer a total of 21 calendar days to redeem the merchandise for the purchase amount and any associated fees. Other states or local statutes allow the pawnbroker to sell the merchandise immediately.
Quik Pawn Shop company policy says if a consumer changes their mind about selling the item outright, the transaction is treated like a pawn loan, where you repay the money you received for the item plus a standard pawn fee.
So you see, with the information we’ve provided, hopefully you are able to gain peace of mind and have a clear understanding about the pawn regulations and your options should you find yourself in a sticky pawn situation.
If you have any questions about the pawn process or would like to move forward with getting a pawn loan in Alabama, look to Quik Pawn Shop. Quik Pawn has 15 locations in the Montgomery, Birmingham, Mobile, and Tuscaloosa areas. Customers have trusted them for nearly 40 years, and so can you. Call 855-402-PAWN (7296) to get started or click here to find a Quik Pawn Shop near you!
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