Uh-oh, your bank account is nearing the $0 and you’ve still got bills to pay. We’ve all been there at some point in our lives. Pawn shops are a great way to come up with some extra money.
Almost 300 million people in the United States use pawn shops every year. These shops are great for those who don’t have the best credit score.
However, if you’re doing business with a pawn shop you’ll have two options; pawn or sell. There are a few things to understand before you decide which option to choose. In this comparative guide, we will explain to you the key differences between pawning vs selling!
First, you should know that pawn shops won’t just take anything. Your item will have to offer something of value. This is true concerning both pawning and selling. As we get further into each option, you will understand that they have to be able to make money.
Both options are a great way for you to make some money. You will also need to understand that you will not get the full price for your item.
Remember that you are using a middle-man and they are not the end buyer. Going in with realistic expectations is important snd will allow you to better negotiate.
You can find a wide variety of items at pawn shops. Some of the most common are jewelry, electronics, tools, collectibles, coins, guns, and instruments.
However, some pawn shops will assist you with more high-end items. These include automobiles, boats, trailers, and RVs.
Selling is exactly what it sounds like. You will be giving up complete ownership of your item. It now belongs to the pawn shop.
Unless you want to purchase the item at their listed price, you will not get the item back. You will not have to pay any money back.
So, what are the benefits of selling rather than pawning? The first and most predominant benefit to selling is that you will get more money.
This is a great option if you want a loan but want to avoid the hassle of the loan process. You also won’t have to pay anything in return.
Besides, this is a wonderful opportunity to get rid of your unwanted items. Instead of having a garage sale and waiting all day, you can see if you have a buyer right there. That takes more of the hassle off of you.
Since you are selling, you will avoid the nuisance of interest fees and payments. You’ll get your money all at once and be done with it.
The biggest downside to selling is that you are giving up your item. If this is an item you are attached to, you likely won’t want to part with it.
That means that you can’t use the item in the future if you wanted to use it for collateral. There are few cons to selling as long as it’s not an item that you are attached to or are interested in using again in the future.
Pawning means that you are giving up your item and gaining money in return. There are a few ways this situation can go and it’s not so straightforward. Pawn loans are similar to regular loans but made easier!
The most prominent benefit to pawning is the fact that you can get your item back. If the item holds sentimental value or it’s just something that you still enjoy, you’ll have the peace of mind knowing it’s not gone forever.
As mentioned, there is no checking your credit score. You’ll be able to get this type of loan without that process and stress. The only thing that will determine if you can get a loan and how much is the value of your item.
If you aren’t able to pay off your pawned item, it won’t affect your credit score. Since there is no tie to your credit history, you won’t be penalized for defaulting on this loan type.
Another great benefit is that you will know very quickly if your item is acceptable collateral for a loan. There is no long and drawn-out process.
There is nothing set in stone saying you’ll end up with your item back in hand. You must make your payments on a set schedule. By the end of the loan period, you will have to have the loan paid off in full.
If you want to renew your loan, you may do so. However, you will be charged additional interest and fees for this.
Pawning also won’t get you the most money. Selling your item is a much better option for getting the most out of your collateral. You can expect to only get a percentage of what your item is worth and if you don’t pay you will lose your item.
Which leads to the last disadvantage to pawning, you might lose your item. If you can’t pay the pawn shop back, they will take ownership of your item. Then your item will be sold so that they can make their money back.
Your Turn to Choose: Pawning vs Selling
Depending on your situation, you will likely be drawn to pawn or sell. Now that you know the difference between pawning vs selling, you can make the best decision for you. This is a great way for you to make some extra money to get you by or just a hassle-free way to make some money!
If you are interested in utilizing pawn services, learn more about us!