You need some cash and you have some valuable items - but you're not sure if you should sell or pawn. Pawnshops will generally buy any item outright that they're willing to loan money for, and there can be times when that might actually be better. Though a loan does mean that you get your item back, selling the item entirely could get you the money that you need without any additional hassle.
Here are a few questions to help you decide whether you should sell or pawn an item.
How Much Money Do You Need?
In general, you're going to get more money selling your item than getting a loan. When you sell an item, you'll get a fairly significant percentage of its value. Sometimes, you may get up to 80% of the retail value of a piece if you are selling something that has fairly high demand.
But if you're getting a loan, the pawn shop has to do much more to accommodate you. They need to keep your item, track your payments and potentially sell your item if you never come back for it.
A pawn shop can give you an estimate on how much they can offer for either a purchase or a loan - and you can decide from there.
What Type of Item Is It?
Lending is different from buying because the assumption is that an item pawned will eventually be purchased back by its owner. Thus, a pawn shop may be more readily willing to take in an item that isn't likely to sell if you're pawning it rather than selling it.
Some items (such as power tools, jewelry and smartphones) are always in demand. Pawn shops will both purchase these items and offer loans against them. But other items, such as niche collectibles, may not have a market. Though they have a value you can take a loan out against, they may not be easy for the pawn shop to sell again. Thus, a pawn shop may not want to buy an item like this outright.
There's also something else to consider: whether the item appreciates in value. If you have an antique that is going to appreciate in value, you may not want to sell it right now because you may be able to sell it for more later - or take out larger loans against it later.
Is Your Credit Important?
A pawn shop loan isn't going to immediately impact your credit. But it can impact your credit if you are late on payments or if you default on the loan. Pawn shops may report your delinquency to your account and will still take action against you to collect their money. If you can't risk your credit right now, you may be better off simply selling the item.
Are You Going to Be Back?
Finally, the most important difference between selling and pawning is that pawning is really not worth it if you aren't going to come back for the item. Be realistic. If the item is something that can be purchased anywhere (something without sentimental value) it may be better to simply sell it now and repurchase a similar item later on when you can.
If the item is sentimental or something you definitely want back, pawning may make more sense. Pawning does involve interest rates, lending fees and late fees, so it's often not a good idea for items that can be replaced.
Regardless of whether you're selling or pawning, pawn shops can often give you a very good deal - especially in relation to other lenders. If you want to know how much your items are worth, you can contact American Pawn. American Pawn operates as a full-service pawn shop, loaning at top dollar and selling at discounted prices. Visit American Pawn today.