How to Decide Whether You Should Pawn or Sell Your Valuables

What do you do when you need quick cash, and don’t qualify for a personal loan? When your credit card limits are maxed out? When you can’t borrow the money from friends or family?

That’s when you turn to your current assets, and you try to liquidate one or more of your valuables to turn it into cash. But even here arises another question: should you pawn or sell the item to liquidate it?

The pawning vs selling debate is one that you need to know the answer too before you get into a sticky financial situation. In this article, we’ll discuss the pros and cons of each to help you figure out which one is right for you.

When Should You Pawn Your Valuables?

The first step to understanding the pawn vs sell difference is to know what pawning your valuables means. When you pawn an item, you put it up as collateral in exchange for a short-term loan from a pawn shop. 

For instance, you could pawn a car. If you have a $10,000 car, a pawn shop might offer you $6,000 or $7,000 for it. You have the option to pay that sum back within an agreed-upon amount of time — if you pay it back, then the money is yours to keep. But if one doesn’t pay the loan back, then pawned items become the pawnshop owner’s to keep.

Thus, when you need money fast and are confident of being able to pay back the principal of the loan within the determined period of time, you should consider pawning the item.

When Should You Sell Your Valuables?

On the other hand, selling your valuables might be the right option if you’re in another situation altogether.

For instance, let’s say that you don’t need the money right away — it could wait a month or two. In that case, you can ensure that you get the full amount of money that your item is worth by listing it on the market. A pawnshop will never give you a sum of money equivalent to the market value of the item — it will always be quite a bit below.

One important thing to consider in the pawning vs selling an item debate, however, is that it is much easier to sell something at a pawn shop than it is to sell it yourself online. In the latter scenario, you have to haggle with buyers, pay listing fees, and maybe get the item appraised.

In the former, all you need to do is talk to the pawnshop owner, making it a much smoother process. Thus, sell your item yourself only when you have the time to commit to the sale.

Pawning vs Selling — Which One Is Right for You?

There you have it. Now that you know all of the arguments in the pawning vs selling debate, you should have a better idea of which option is right for you.

For more general lifestyle advice, check out the rest of the articles on our website!