PawnSmarts comes pre-configured for KRS Chapter 226 — it separates your 2% interest from the 20% service charge automatically, tracks the 60-day redemption period, and generates the daily law enforcement reports Kentucky requires. From $89/month or $2,995 one time, no contract.
Kentucky pawn law (KRS Chapter 226) uses a dual-charge structure: a pawnbroker may charge up to 2% monthly interest on the unpaid principal plus a separate service charge of up to 20% of the loan value per month (a 22% monthly maximum), must hold pledged property 60 days before sale, and must file daily reports to law enforcement. PawnSmarts is set up for Kentucky out of the box. It applies the rules from KRS Chapter 226, splits the 2% interest from the 20% service charge on every ticket and receipt, watches the 60-day clock for you, and hands law enforcement exactly what they need every day.
Kentucky Revised Statute (KRS) 226.080 sets up a two-part charge system. A pawnbroker may charge up to 2% monthly interest on the unpaid principal balance, plus a separate service charge of up to 20% of the loan value per month (one-fifth of the loan). That puts the total maximum monthly charge at 22% — one of the higher structures in the country, comparable to Tennessee's 2% + 20% and Indiana's 3% + 20%.
The service charge covers title investigation, storage, insurance, closing, daily reporting to law enforcement, and other servicing costs. Under Kentucky law it is explicitly defined as not interest "for any purpose of law." PawnSmarts keeps those two amounts in separate fields, calculates each against the right base, and prints the breakdown where the statute requires it.
Here's how the math runs on a typical loan, exactly the way PawnSmarts computes it.
PawnSmarts calculates both components automatically, tracks the unpaid principal for the interest piece, and applies the 20% service charge to the original loan amount each month — whether your shop is in Louisville, Lexington, Bowling Green, or Manchester.
The two components are handled side by side:
Every pawnbroker must give a borrower a "plain and complete receipt" for any payment, specifying separately the amount applied to principal and the amount applied to interest. PawnSmarts generates a compliant receipt for every payment, showing the principal, interest, and service-charge breakdown without anyone re-keying numbers.
Kentucky pawnbrokers must keep detailed registers and provide daily reports to law enforcement (KRS 226.040, 226.070) — in fact the service charge itself is justified partly by the cost of "making daily reports to local law enforcement officers." PawnSmarts maintains a complete transaction register and exports the daily report file in seconds. See our overview of pawn shop police reporting and LeadsOnline software for how the export works.
Every register entry captures:
Records stay accessible at any reasonable time to the Kentucky State Police, county sheriffs and deputies, and municipal police officers.
Under KRS 226.050, a pawnbroker must hold pledged property for 60 days before offering it for sale. After 60 days, the pawnbroker must send the pledgor written notice of intent to sell to the last known address, and the pawn ticket must show the redemption terms. PawnSmarts tracks every loan date, counts the 60-day hold for you, flags items once they're eligible for sale, and generates the notice letter pre-filled with the pledgor's information.
Kentucky law requires actual physical custody of the pledged property. In Commonwealth ex rel. Chandler v. Kentucky Title Loan, Inc. (Ky. Ct. App. 1999), the court held that "deposit of personal property" under KRS Chapter 226 means actual physical possession — so a title loan where the borrower keeps the vehicle is a secured loan, not a pawn, and cannot charge pawn rates under KRS 226.080. PawnSmarts is built for traditional pawn operations with physical possession of collateral, tracking item locations, storage areas, and condition notes.
Statutory framework: KRS Chapter 226 (Pawnbrokers).
PawnSmarts is $89/month for Essential or $129/month for Professional — month to month, cancel anytime, no setup fee. Prefer to own it outright? Get Professional as a one-time purchase for $2,995. It's free if you use our integrated credit-card processing. Essential covers Kentucky pawn tickets, dual-charge calculation, retail POS, LEADS Online export, inventory, customer records and daily reporting; Professional adds the three automatic SMS & email reminders before each loan is due with secure payment links, online payment so pledgors can pay from home, advanced analytics, and multi-location.
New to this? Start with what pawn shop software does, check the US state licensing guide for Kentucky's requirements, or see all the states we serve.
Kentucky law (KRS 226.080) allows pawnbrokers to charge up to 2% monthly interest on the unpaid principal balance, plus a separate service charge of up to 20% of the loan value per month — a total maximum monthly charge of 22%. The service charge covers title investigation, storage, insurance, closing, daily reporting, and other servicing costs, and is explicitly defined as not interest under Kentucky law.
Under KRS 226.050, a Kentucky pawnbroker must hold pledged property for 60 days before offering it for sale. After 60 days, the pawnbroker must send the pledgor written notice of intent to sell to their last known address. PawnSmarts tracks the 60-day hold from the loan date and generates the notice letter pre-filled with the pledgor's information.
Under KRS 226.090, every Kentucky pawnbroker must give the pledgor a "plain and complete receipt" for any payment, specifying separately the amount applied to principal and the amount applied to interest. PawnSmarts generates a compliant receipt for every payment, showing the principal, interest, and service-charge breakdown automatically.
Kentucky pawnbrokers must keep a complete register of all loans and purchases and provide daily reports to law enforcement (KRS 226.040, 226.070). Each entry must include the date, the pledgor's name and address, a detailed property description, the amount loaned or paid, and the redemption time limit. PawnSmarts maintains the complete transaction register and exports the daily report for LEADS Online and local agencies.
Pawn shop software is generally sold as a monthly subscription or a one-time license, with most full-featured systems running a few hundred dollars per month. PawnSmarts is $89/month for Essential or $129/month for Professional — month to month with no contract, no setup fee and no exit fee — or $2,995 once to own Professional outright, and free when you use our integrated card processing. Every plan includes Kentucky's dual-charge calculation, LEADS Online export, OFAC checks, and 48 states preconfigured, works offline and syncs, and runs in any browser on Windows, Mac, iPad, Android or phone. Switching from another system is a one-time $395 migration, live in under 24 hours.
Open the live demo and click around. If it looks right, sign up and we'll move your data for $395.
Questions? [email protected] · 800-710-6184