Emergencies spell out the need for instant cash, and many of us do not have emergency funds to help offset a financial crisis. Before you make the decision to pawn vs sell your items, be sure to read the rest of this article to get the most money.
In case of a financial emergency that cannot wait, an attractive option would be to turn to a pawn shop. A pawn shop offers you two options: sell or take a loan.
If you require quick cash, a pawn shop is one option that provides a quick solution to a money shortage in a matter of minutes. A pawn shop exchanges your valuables with a percentage of the value of your items.
The Difference Between Selling And Pawning
Pawning is the process of giving out an item, personal property, or valuable for a collateral loan offered in shops offering secured loans. Selling your items in a pawn shop means that a person in need of cash gives out the right to their personal property or valuables and exchanges it with quick cash.
The key difference between selling and pawning is that when you pawn your property, you do not give away the intellectual right; instead, you offer it away over a duration of time which you can pay back the loan with interest.
The item is not yours anymore when you sell, and the said property can be sold to other customers at the pawnshop.
Pawning Items At A Pawn Shop: How It Works
When a client comes in with an item they want to exchange for a loan, the broker first examines the object, be it jewelry or electronics, and determines its value. The broker then extends the loan based on the collateral. Once accepted, the broker offers a pawn ticket detailing any fees and the extent of your loan period.
Typically pawn shops offer 30 days loan period where the property owner is expected to have paid the items’ determined value together with interest. If the loan is not paid in full, the pawnbroker has the liberty to offer the item for sale to other clients.
Likewise, if you exchange your valuables for quick cash and never return to the pawnshop, the pawnshop broker will also offer the collateral item for sale to other clients.
Pawnshops are regulated entities with rules and regulations that they must follow. One of their most basic practices is to include the name, address, and phone number of every person who brings in something to pawn. They must also indicate the serial number for traceability, security, and preventing stolen merchandise movement.
The valuables, especially precious stones like gold, gold jewelry, and diamonds, must be checked for authenticity before the pawnbroker extends the loan to you. Electronics and cars also need to be checked to see if they are in working order, and their serial number is taken where applicable.
It’s important to note that pawn shops don’t accept every single item. They will only take what they know they can resell to make a profit. Even when they evaluate your item’s value, they offer you a percentage of that value so the pawnshop can make a profit if they repose ownership of the item in exchange.
Pros Of Pawning Your Property
Every year an estimated 30 million Americans seek the services of a pawn shop. This is despite financial institutions offering competitive loans. Pawning is safer for small emergency loans.
Advantages Of Pawning Your Property
If you’re looking for a nearby pawnshop, the best search is to Google “pawn shops near me.”
1. Instant Loans
The processing speed in a pawn shop is the most significant advantage in pawning your valuables. Banks and other financial institutions take days to approve loans, and the process is also hectic. But, on the other hand, a pawn shop is a get-in and comes out with much-needed money.
2. Zero Credit Checks
Pawnshops have a policy that does not check and is not interested in a person’s credit history. Therefore, a pawnbroker will never ask whether your credit score is negative or positive. This is because the only requirement you must have before taking a pawn loan is collateral, and your valuables act as enough collateral for the loan you intend to take.
3. Zero Impact On Your Credit Rating
Since pawn shops aren’t interested in a person’s credit score, their services have zero impact on one’s credit rating. This is unlike traditional loans, where even one late payment will attract changes to your credit rating.
A bad credit score will affect your ability to borrow from lenders, and in case of another financial emergency, it will be challenging to acquire a loan. Therefore, to avoid a bad credit score, it is advisable to pawn your valuables when you require a small loan.
4. The Primary Consequence Is The Sale Of Your Items
When you fail to pay a pawn loan, you lose your collateral to the pawnbroker, who sells your valuables to cover the amount of money you owe them. This is unlike traditional loans, where If you fail to pay a bank loan, you acquire a poor credit score, making it difficult to receive a loan from a financial institution with a negative credit score.
5. You Can Have Several Loans
In a pawnshop, all that matters is the collateral you bring; you can therefore obtain a loan any day of the week if you have enough valuables to pawn. However, a new loan request requires one to have a new collateral item.
Other money lending institutions have little flexibility because they expect you to cover your first loan before applying for another.
6. Pawn Loans Don’t Affect Your Bank’s Lending Ability
The pawnshop cannot notify your bank if you discord your loan payment, which means that your bank’s lending ability is not affected even when you have taken multiple loans from a pawnshop.
7. Little To Almost Zero Paperwork
A loan from a traditional lender is followed by extended protocols that have to be followed. This is why their loans take time to process. It begins with pre-approval, then the application process, followed by investigations and interrogations depending on the security.
Pawn shops require loan paperwork, but their paperwork entails just one contract that dictates the loan terms and allows the pawnshop to presume ownership of the collateral if you fail to pay up.
8. Loan Incurs Interest Only In The Borrowed Period
Pawnshop loans earn their interest monthly. If you can complete the loan payment within the first month, you will only pay interest for that first month. The longer you stay with that loan, the more interest it accrues.
However, the loan contract indicates and restricts the loan repayment duration so they can know when to presume ownership of the collateral and sell.
Cons Of Pawning Your Property
1. Not Receiving the Total Value of Your Items
A pawnshop is a business entity, and it must gain a profit from the items they buy and sell. This means that it’s easier for them to undervalue your items so that if you do not pay off their loan on time, they can sell the item in exchange at a higher price.
2. It’s Easy To Lose Your Property
If you pawn items at the pawnshop, you need to stay current with the payment, and you will get your valuables back. However, if you fail to make payments, the pawnshop has the authority to repossess and sell your item, which means you lose what you gave them as collateral.
3. Pawnbrokers Could Easily Deny You A Sale
It’s not a guarantee that the pawnbrokers will accept your item, and this could be stressful, especially if you need quick access to cash. Pawnshops also reject things they see no value in and others that are not original.
A pawn shop may also refuse your item if they have other such items in their inventory and feel that they may not quickly sell if you do not pay.
What To Pawn At A Pawn Shop For The Most Cash
The most common items acceptable at all pawn shops that can give you the most cash include luxury watches, genuine jewelry, valuable gems, and rare stones like gold jewelry and diamonds.
In addition, some stores accept laptops, guns, smartphones, video game consoles, and other types of electric devices. These, too, give you a pretty good amount of cash.
Selling Items At A Pawn Shop: How It Works
Pawnshops are primarily famous for their quick loans against valuable collateral like gems and jewelry. However, pawn stores also buy these valuable items. Therefore, when one comes in with an item they want to exchange for money, the process is basically the same as pawning. The item must be valued and registered before the transaction takes place.
Pros Of Selling Your Items
The primary benefit one gets once they sell their items to a pawnshop is the higher value. For instance, when you have a watch worth $2000, you may only receive a loan worth $600 when you pawn it, but you may get $1600 for the same watch if you sell it to the pawnbrokers.
Selling in this regard is more beneficial for those who need a substantial amount of money and those who don’t want to go through the hassle of servicing a loan.
Selling at pawn shops is also beneficial because it lets you eliminate things you no longer need. For example, if you have a new gadget or unwanted jewelry, you can sell the older ones because, after all, they are now unwanted items in your possession.
Selling an item instead of pawning it relieves you of the stresses of regular payments and interest fees. In addition, selling that item will mean you will conduct just one transaction that will give you a substantial amount.
Cons Of Selling
Selling an item at a pawn shop means you have given away all the rights to it and will never get it back. Problems occur when you sell an object, such as a family heirloom, that holds sentimental value. You’ll lose that family heirloom and break the family sequence, passing it down from one generation to another.
Selling an item also means you only get a substantial amount once, and when you experience another financial emergency, you cannot sell the same item. When you pawn, you can retrieve it and use it as collateral in the future.
What Can You Sell At A Pawn Shop?
Each broker chooses what they want to take /issue a loan against or buy. Here are some items that are not easily rejected at pawn shops.
- Jewelry such as gold, gold watches, gold coins, silver coins, and other precious metals
- Sports equipment like bikes and gym equipment
- Computers and laptops
- Musical instruments
- Video games console
- Silver tableware and flatware
Other items that can be pawned at some pawn shops for a loan or cash include:
- Comic books
- Real estate
- Animals-pets and livestock
- Vehicles include cars, boats, trucks, scooters, motorcycles, golf carts, ATVs, and other high-end items
Should I Sell On OfferUp Or Craigslist Instead?
We all want the most out of our valuables; we, therefore, must weigh our options right to determine where we can get the best deal for our products in the least amount of time and using the least effort.
Craigslist and OfferUp are online platforms that allow the item owner to advertise it on their website for large audiences to buy.
A pawn shop is a physical shop where you take your valuables, and within no time, you either get the cash or the loan you desire.
We, therefore, compare their pros and cons to determine if we should go to craigslist and OfferUp instead of a pawnshop.
Advantages Of Craigslist And OfferUp
- Large target audience
- Bidding style sales
Advantages Of Pawn Shops
- Ability to negotiate
- Instant cash
- Safer because you don’t have to meet up with strangers
- You can pawn and get your valuables back after payment
- Accept gold and broken jewelry
Disadvantages Of Craiglist And OfferUp
- Unsafe if you have to meet the stranger you are selling to
- There are clusters of listings on the websites, and your items may get buried
- The inconvenience and cost of shipping
- Great competition
- It wastes a lot of time
- You may not get your asking price
Disadvantages Of Pawn Shops
- You may not get your asking price
- You have to take your valuables to the pawnshop physically
Weighing the advantages and disadvantages of Craiglist and OfferUp compared to pawn shops, it’s better to sell at pawn shops than on other online platforms.
Other Places To Sell Your Items
There are other online marketplaces where people can sell their valuables. Others include Mercari, eBay, Etsy, Amazon, Handshake, Ruby lane, Chairish, Bonanza, Swappa, VarageSale, Nextdoor, and Vented. In addition, many online gold buyers only specialize in gold and gold jewelry.
Do You Generally Get More Money If You Sell Or Pawn Your Items?
You get more money when you sell your items than when you pawn the items. When you visit a pawnbroker, the brokers first evaluate the item’s authenticity and value. If you decide to pawn, the broker chooses a percentage of the total value they can give as a loan.
For example, if you take diamonds whose total value is $1000, the pawnbroker can give you a loan of a third of the total value.
If you decide to sell the same diamond worth $1000, the pawnbroker will offer you around $800 because, as a business, they also need to turn it around and make a profit. This means that selling an item at a pawnshop will earn you more money than pawning the same item.
Is It Better To Sell Or Pawn Your Jewelry And Gold?
Gold, just like other expensive jewelry, is an asset. Gold has a market value and is publicly traded, just like a stock. Gold prices will fluctuate due to supply and demand, political temperatures, and buying power.
Before determining whether to sell or buy gold and other jewelry, it’s essential to know its value. This will allow you to evaluate and know how much you can receive if you pawn it and how much you can earn if you sell it.
Gold’s price will be based on what the market offers at that particular time. Using this as a base, the pawnbroker will provide you with a third of its total market value. If selling, the pawnbroker will give you a price lower than the value of your gold.
You must also understand that gold’s price also depends on its purity. A 24-carat is the purest, followed by 22-karat, 18-karat, 15-karat, and so on. Knowing how pure your gold is, is critical because that’s how you know what to expect from a pawnbroker.
Determining whether to pawn or sell depends on whether you need a substantial amount of money or want to keep the gold as future collateral for other short-term loans.
As we said before, gold is among the most valuable items you can pawn and can be used as an asset, and you may take up a loan where you will most likely be offered a third of its total value and lose the gold when you cannot complete payment.
It’s, therefore, safer to sell gold and go home with a substantial amount of money.
What Jewelry Has The Highest Value At A Pawn Shop?
The value of jewelry depends on the metal used in making the jewelry, the jewelry’s condition, the 4Cs rating for diamonds, and the current demand for that jewelry. The jewelry that attracts the highest value at a pawnshop includes platinum, gold, diamonds, gold-plated jewelry, coins, and other rare gems in no particular order.
What Things Do Pawn Shops Give The Most Money For?
Pawnshops offer the highest money for jewelry like gold, diamonds, coins, fine watches, luxury handbags, and antique items such as timepieces. Pawnshops are always eager to offer cash for gold, jewelry, gems, vehicles, power tools, and guns.
Tips On How To Get The Most Money At A Pawn Shop
1. Be friendly to those at the counter: Those that work at pawnshop counters meet all kinds of people. Being friendly and acting genuinely will help you get the most for the item you brought in.
2. Clean your items before coming to the pawnshop: always think of the pawnbroker as a potential buyer. One of the reasons they will accept your item is based on its condition. If it’s dirty and gross, the pawnbroker may end up declining or valuing it lower than it is.
3. Never explain why you are pawning your item: it’s important to note that all that matters in a pawn shop is your item and its value. You will not get more for telling the pawnbroker why you are pawning, and they have probably heard worse. So, again, you don’t owe anyone an explanation.
4. Always reject the first offer: it’s advisable to always do your research before going in to pawn your items. This will help you realize how much you want for your items and how much you are willing to compromise. Most pawnshops choose to be upfront by offering you their best price. If the brokers’ price drops from what you expected, then decline their first offer. Suggests a 10-20% increase. If the price is reasonable, they will increase; if not, they will stick to their original price, which you will accept.
5. Be ready to walk: If you get a bad vibe from a pawn shop, always be prepared to walk; not all shops are good and genuine. If one can’t offer you a fair price, the next one will probably give you a better offer.
6. Ask for consignment: other than just outright selling or pawning your item, ask the pawnbroker if they offer consignment. This is where the shop sells your item and pays you some amount out of their profit. This way, you have more control over your item and get a better deal.
To Pawn Or To Sell
Pawnshops offer a more straightforward solution to offset your financial situation during emergencies. It doesn’t matter if you have a negative credit score or credit card debt; pawnshops got you covered. But, of course, the question is always whether to take a loan in exchange for cash or sell. T
he best answer is found in your needs and wants. How much do you need and want to use the item as future collateral? The best deal is, however, always with the selling option.