Is it better to pawn or sell an item at a pawn shop?

two rosegold rings with ornate carvings

If you’re in need of quick cash to cover unexpected emergencies, a pawn shop is a great place to get the money you need. At a pawn shop, you have the option of getting a collateral loan on items like gold, diamond or platinum jewelry, or you can sell those items for cash. Millions of Americans visit pawn shops each year, and many wonder whether they should pawn their item or sell their item. While there are several factors to be considered when deciding whether to pawn or sell an item, it is generally considered a better pawn an item, as you’ll get the cash you need with no credit check and without having to give up your item for good.

If you’ve never been to a pawn shop before, you should take a moment to understand the difference between pawning and selling. Pawning an item means that you are using your item as collateral to secure a loan.  After appraising the value of your item, the pawnbroker will work with you to determine the loan amount. You’ll leave your item with the pawnbroker until it’s time for you to come back, repay the loan and collect your item.  Click here to read more details about how the pawn process works.

Selling an item at a pawn shop is simply that: selling the item to the pawnbroker. When deciding whether you want to pawn or sell, you should determine whether or not you want your item back. Does your item have sentimental value? Is it something you easily can live without?  If not, it is highly recommended that you pawn your item. You should also consider the value of your item. If you take out a pawn loan on diamond or platinum jewelry, you can use the item as collateral again and again. As the item’s value increases over time, you can secure larger pawn loans. Since a pawn loan is less of a risk to pawnbrokers, you can generally get more money for the item than by just selling it.

The best part about pawning your item is that you have no obligation to repay the loan. Since you’ve used your item as collateral to secure the loan, failing to repay can never affect your credit.