Selling or pawning: Pros and cons
There are times when we face decisions when it comes to giving something away for money, but very often, it will involve sacrificing an item one can hold strong feelings of attachment towards it. Here we will discuss about the differences between selling and pawning, its pros and cons and which situations we consider best through your decision-making process.
One thing is clear; when you sell an item, you may never get it back. As soon as money is exchanged for whatever you are selling, you automatically lose ownership on it. On the other hand, pawning gives you a short-term loan in return and a certain level of assurance over your item. Depending on the valuation process of your item by the pawnbroker, a fixed amount will be offered under the concession that you pay back the money within the agreed time period. Your item will be kept securely throughout the duration of your given loan. Once you pay back your loan plus interest inside the time period agreed, your item will be retrievable. If you fail to do so, your pawnbroker will display your item for sale in order to recover losses.
The strategy best for you may not be as evident as it initially may appear to be. Before you settle on your choice, go over some of the advantages and disadvantages we have gathered about pawning specifically, which we think could be a of a better option.
- Ownership: The greatest plus of pawning an item is that at the end of the agreement if you have respected repayment preconditions, the item is still technically yours. Thus, you can retake your grandmother’s precious stone ring passed on from your mom and present it to your child who will carry on tradition.
- Risk-free: Since pawnbrokers are not bankers, your credit history is not taken into consideration when borrowing. Your actual item that is being traded for money is a secured loan, only difference is that if you are unable to pay back, you won’t be getting those nasty calls from debt collectors and final notices via mail.
- Access to cash instantly: Imagine simply walking in a pawnshop and leaving with cash in your hands within 20 minutes. Not having to make an appointment or wait days for a positive response from the branch manager, which sometimes, can be almost like a soap-opera drama scene.
- Risk of losing repossession of your item: As complied in the signed agreement with your pawnbroker, if you fail to pay back your loan within the allotted time period, your item can and will be sold. In the case where you know in advance that repaying your loan back with interest won’t be realizable from your end, then considering selling your item could be a much better option.
- Turndown from pawnbroker: There is a chance that a pawnbroking loan could be refused to you directly at the counter if the representative concludes that the item in question is with no value. Sometimes, especially with pawnshops having multiple locations, your item might be considered at another branch. Though this is not a guarantee, always do your own research and be honest with yourself when knowing what you will bring forward.