What Are The Main Differences Between Pawning and Selling?

For those who have never sold or pawned anything at pawnbrokers or jewellers, you must understand that it is important to understand the differences between selling vs. pawning. There are pros and cons between the two and before delving into the differences both terms do simply refer to giving up an item for financial gain. The main thing you need to consider when deciding whether you want to pawn or sell an item is whether you wish to part with your item. Is it a family heirloom or something of significance to you? If this is the case, then you will probably want to pawn it rather than selling it in case you want it back after you have made use of the loan and managed to get the money back. 

Selling vs Pawning

The main difference between selling and pawning an item is when you sell, you give up ownership of the item. When you pawn, you can still get the item back as long as you return the money you borrowed. Just based on this alone, it might look like pawning is the better option but, if you dig a little deeper, however, you’ll discover there are other factors to consider before taking your item to a jewellery shop or pawnbrokers. 

Selling

The one main benefit of selling an item is that you get a much higher value compared to pawning. For example, if you took your watch to sell and they said it was worth £1000, with pawning you would only get around £300 whereas selling would get you the majority of the value (around £800).

This means that if you wanted more money at that specific moment, selling is the better option for you. You also don’t have to pay anything back - the money you get for the item is yours.

Additionally, selling gives you a chance to get rid of things you no longer need. If you have jewellery, a phone or gadget, why pawn them if you don’t need them? You can sell them and then you never have to worry about them ever again (plus you have gained some money). Also, because you are selling them and not pawning you don’t have to worry about regular payments and interest fees as the cash is given to you in one sum and transaction. This overall is just a much quicker process than pawning and one less financial worry to panic about.

Pawning

That said, selling an item does mean that you can never get that item back. But, with pawning, you can still get it back as long as you pay the fees and the loan.

Selling also means that because you can’t get the item back, you can’t rely on that item for another loan in the future - so less financial security. However, when you pawn, you can retrieve the item and can then pawn it again when you require more money. This means also that a benefit is that pawning won’t affect your credit score - pawn shops only look into the value of what you are pawning, when they transact a loan and not your credit history. Therefore, you don’t have to worry about your credit score if you miss a payment. 

Another benefit of pawning is that it is a quick process as applying for a loan through the bank can take days or even weeks, so if you need money fast - pawning is the way forward. There’s no guarantee but with pawning, you will know right away if they accept your item and will know if you’re having money in your pocket.

In need of quick cash? Now you know there are two great options and here at Cuttings we can help! If you can’t secure a loan, selling or pawning seem great for you and although they seem similar, they have subtle differences which are significant to consider before you sign away your valuables. Get in touch with us to find out more.

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