Pawn Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Pawn, written in plain English, along with examples of how it is used.

What is Pawn?

It refers to the an item of personal belonging and of value higher than the loan, pledged as security or collateral for a loan or debts. Such personal belonging or property is deposited with pawnbrokers who has the right to encash such pawns incase there is a default in repayment of the loan. The interest rates are very high and the loan amounts are small. Pawnbrokers are licensed by the government.