What is the difference between pawn and selling?

If you have no idea about what a pawn shop is, take a moment to understand the difference between pawn and selling.

Pawn: it means to deposit a security (gold, diamond or platinum etc.), as for borrowed money specially from a pawnbroker.

There are moments in life when you are running low on cash and some unexpected emergency comes your way, in such a situation if you don’t want to sell your precious item, you pawn it. Pawning your belonging means using your item as collateral to secure a load. The item remains with the pawnbroker till you have the money to return the loan and then you can take your item back.

How pawning works:

There can be deviation in rules and regulations as per the customs of different areas and how pawing has been working there.

Generally, loans are written for e period of time (between 3-6 months). The loan is insured only if your belonging is valuable enough to pay for double the amount you loaned, and if so your item is secured in vaults and you get the amount in cash.

You can redeem the loan at any time before the end of time period decided. You can increase the deadline by paying the interest till date and get another deadline. At redemption, your belonging will be given to you with the repayment of the decided interest and fees.

To speak in lay man’s language pawning is you giving something of value in exchange for loan. If you don not pay the loan back including the interest decided after a certain period of time, pawn shop owner gets to keep whatever you gave up.


As economy continues to struggle more and more people are discovering the benefits of pawning to get them get through their tough times. When pawning you get money and you can also recover back your item by paying the debt. When you sell something, you get good money but the thing is gone forever. When in financial crisis and in need of quick money you have always thought that let us just sell that precious thing and get out this hard time but if your hard time is temporary and you think you can make more money than you need right now, wait, do not sell what you don’t want to, pawn it instead and get it back later. Listed is the difference between pawing and selling.


  • Secured loan
  • Return the amount in a specific period of time and get back what you gave else the broker gets the possession of your belonging.
  • Works on different terms and conditions in different areas and between different parties.


  • Give away the item for money.
  • Once you get money, you are no longer the owner.
  • One party loses the possession in exchange of money.


Ownership is lost right at the moment when you you sell a thing, where as a person pawning doesn’t loose possession till he fails to return back the loan with in the decided time period.


If you pawn, you are in debt of the pawnbroker where as when you sell a thing, there is no more concern/relationship between you can the buyer.


This is an important and big factor. The one which makes a person think many times before deciding to pawn or not to pawn his stuff. When you pawn a thing you need to pay back the amount you got along with the decided percentage of interest to get back the thing, whereas when selling, there is no interest involved.


The pawn shop owner will lend you amount less than the worth of the product and you also have to pay interest along the actual payment. Whereas you get good amount of money when selling a valuable product if you wait for the right buyer.


In most of the countries pawnshops are ran by federal government thus you can be at peace that your item will be secure. Selling can be done via online selling, specialty stores, auctions, consignment stores etc.

This is a decision you should make after thinking critically. If you have something whose long term value is great, you should consider pawning instead of selling it away. When you try to sell something urgently you don’t even get good money for it. Regardless of what you chose you return with cash in hand, thus if you don’t want the item anymore, it is better to sell it out.