Pawning vs. selling – what's the difference? We all know that pawn shops are places where you can take your old, unwanted items and turn them in for cash. But how do they work when it comes to pawning something if you already have something? Let's find out!
What Is Pawning vs. Selling?
How does selling work?
Selling items at a pawn shop is pretty straightforward, making it an incredibly convenient option for the general public. All you need is an item, or items, of value, which you can trade for cash. Selling at a pawn shop can be broken down into four basic steps: finding an item of value, finding a reliable pawn shop, preparing to sell your item, and finally selling your item to the pawnshop. After the shop assesses the value of your item, you can choose to accept its offer or try your luck at another shop. If you accept, you can then receive money the same day that you sell your item. This easy process of getting quick cash makes pawn shops an attractive option to many people.
How does pawning work?
Alternatively, you can choose to pawn your items instead of selling them. In pawning, your item serves as collateral for a loan. Instead of saying goodbye to your item, pawning allows you to retrieve it for a price. To get your item back, you’ll just have to follow the pawn shop’s rules and terms. This includes paying your loan on time and paying off the interest.
When you pawn something, you’ll be given a loan period that dictates how long a loan can be paid in full. This will depend on the agreement between you and the pawnbroker. Loans from pawn shops typically have term lengths of 30 days.
Pawning your items is much more convenient than taking out a loan from traditional financial institutions such as banks. For one, you won’t have to go through hoops just to have your loan application approved. Banks require too much paperwork, which can be a hassle for people who are pressed for time. Pawnshops generally only require a form of valid identification for you to complete your paperwork.
And you’re probably wondering, “Can you pawn something if you already have something pawned?” The answer is a definite yes. Pawn Shops allow you to take out multiple loans even if you already have one. Financial lenders also let you borrow more than one loan at a time. However, if you don’t manage to pay them on time, this will negatively affect your credit score. In contrast, going to pawn shops for loans won’t impact your credit score at all, and you won’t have to worry about the disadvantages that come with bad credit.
Pawn Shop Rules and Regulations in the USA
Contrary to the belief of some, pawn shops in the US are regulated at all levels, from federal to state and local. In the sunshine state, the Florida Department of Agriculture and Consumer Services (FDACS) mandates pawnshop owners to acquire a license for their business annually. This license ensures that each shop is operating in accordance with the law. Failure to comply with the regulations means that a pawn shop can face penalties of up to $5,000.
According to FDACS, pawn shops in Florida are allowed to charge an interest rate of up to 25% each month. Additionally, the regulating body doesn’t put a limit to the number of extensions that can be granted for a pawned item. This means that the number of extensions is up to both the pawnbroker and the consumer. FDACS further states that a loan can be extended at any time even before the default date is up. The extension date would have to be mutually agreed upon by the pawnbroker and consumer alike.
Pawning vs. Selling FAQs
1. How long can you pawn something for?
The answer to this would depend on the pawnshop you’re eyeing. In general, you can expect to pawn an item for about 30 days. Sometimes, a grace period of 30 days after the initial month will be given to you by the pawnshop.
However, it’s best to check first with the shop that you’re transacting with just to be sure. You wouldn’t want to miss paying your loan on time because otherwise, you’ll forfeit your item. You can always purchase the item back; however, in some cases, it may be sold at a higher price than when you’ve pawned it.
2. What percentage does a pawn shop give you?
A pawn shop would generally give you around 25% to 60% of an item’s value. If you have an item with a high value, a pawn shop’s offer would also be quite high in return. This is why if you’re aiming for higher gains, consider items in demand or high-end.
3. What sells high at a pawn shop?
Pawnshops are always looking for luxury items and limited edition products, so they’ll pay a hefty price for those. Other items that sell high at pawn shops are jewellery, gold, and diamonds.
4. Is pawning better than selling?
This would also depend on several factors. To answer this question, consider the item you’re looking to pawn or sell first. Is it highly valuable for you? Is there sentimental value attached to it? For instance, if it’s jewellery that’s been gifted to you by a beloved relative or person, then pawning it may be a better option. This way, you won’t have to worry about saying goodbye to the item. On the other hand, if the item doesn’t hold much sentimental value to you, or you don’t want to pay off interest rates, then selling it would be the way to go. Either way, you’ll be able to get quick cash conveniently.
Entrust your valuables to pawn shops that you can rely on. Whether you’re looking to pawn or sell your valuables, Fla-Pawn is here to offer you the best deals. Contact us to learn more, or book your free appointment now!