How much is your pawn loan book actually earning?
Estimate the interest and storage revenue your active loans generate every month and year, the value of the inventory forfeited loans put on your floor, and what a small lift in your redemption rate is worth. Enter a few numbers from your shop and get an instant breakdown.
What is your active loan book worth?
Enter your average loan size, how many loans are on the books, your monthly interest and storage rate, the typical loan term, and your redemption rate. We will estimate your monthly and annual loan revenue plus your forfeiture inventory value.
Model assumptions (editable)
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Tell us where to send the full breakdown. We will also email you a copy for your team.
Model logic. Total principal = average loan size times number of active loans. Monthly revenue = total principal times monthly interest and storage rate. Annual revenue = monthly revenue times 12. Forfeiture inventory value = total principal times the share of loans that forfeit (100% minus redemption rate) times the forfeit resale multiple. Redemption-improvement value = the extra annual interest and storage revenue from raising your redemption rate by the modeled percentage-point lift. All figures are estimates for planning only, not a guarantee, and depend on your loan mix, local rate caps, and how quickly forfeited goods sell.
Frequently asked questions
How do pawn shops make money on loans?
A pawn shop earns a monthly interest and storage charge on the principal it has loaned out against collateral. When a customer redeems the loan, the shop collects those charges as revenue. When a loan is not redeemed, the shop keeps the collateral and can sell it on the floor, which is a second way the loan book turns into profit.
What is a good redemption rate for a pawn shop?
Most healthy pawn shops see the large majority of loans redeemed, often in the 75 to 85 percent range, though it varies by market and loan mix. A higher redemption rate means more loans stay on the books earning interest and storage every cycle, which is the most predictable revenue a shop has. Tracking redemption over time in your point of sale is the best way to see whether it is trending the right way.
Why does a small redemption improvement matter so much?
Every loan that gets redeemed instead of forfeited keeps earning interest and storage for additional cycles, so even a few percentage points of improvement across a large loan book compounds into meaningful annual revenue. Better customer reminders, flexible payment options, and clear ticket terms all nudge more customers to come back and redeem, which is why shops watch this number closely.
Is forfeited collateral profit or inventory?
Forfeited collateral becomes retail inventory rather than immediate cash. Once a loan is not redeemed, the item moves to your sales floor and its value is realized when it sells at retail margin, not the moment it forfeits. That is why this calculator shows forfeiture inventory value separately from interest and storage revenue, so you can plan both your cash flow and your floor.