To pawn or to sell?
It’s important to understand the difference between these two options before making a decision.
As pawn shop owners, we ask the question if customers are interested in pawning or selling their items. Sometimes we get looks of confusion and we like to make sure everything is understood before a transaction occurs.
Selling: One-Time Transaction
Selling to a pawn shop is a one-time transaction. You bring in an item of value, such as a used gun or instrument and the pawnbroker will make you an offer for it. It’s a one-time deal; the pawn shop keeps what you sold and you keep the money. It’s a simple, permanent transaction.
Pawning: A Type of Loan
Pawning an item, on the other hand, is a type of loan. The item you pawn is used as collateral against the loan you take out in exchange. There are a few more details on how pawning works on the National Pawnbroker Association FAQ page.
Interested in pawning something? There are three main factors you should expect:
Appraisal And Agreement
Before you receive a loan on an item you want to pawn, we will appraise it. This means that we will determine the value of your item, and the loan amount it’s good for (a percentage of its total value). According to the NPA, the average pawn loan is $150.
If you accept, you will receive a document covering the terms of the loan. Be sure to thoroughly understand what you’re agreeing to before finalizing the transaction.
Length Of Loan
We will give you a loan repayment deadline. By or before that date, make a payment to ensure you retain ownership of your item. You will have two options: you can pay all interest to-date or repay the entire loan, including interest. NPA statistics show that up to 85% of pawn loans are repaid.
Loan Repayment vs. Interest Payment
Paying all interest to-date will allow you to renew the loan period, retaining ownership of your item until the new due date. Paying in full means the item is returned to you and concludes your agreement.
Security Against Credit Damage
Should you be unable to repay your loan, the item you pawned will serve in place of repayment, protecting you from any damage to your credit score.
Knowing the difference between pawning and selling is important. Hopefully the information above has helped you so you can make the right decision for your situation.
Please stop in to see us at McBride Music & Pawn. We look forward to meeting you!