We all know what selling means. In a sale, one party loses the possession of the item for sale, in exchange for some money. The person paying the money acquires full ownership of the product which he has purchased and can use it for whatever purpose he wants. If we consider an example of the sale of jewelry, the seller accepts a certain amount of money in exchange for the jewelry. The seller loses the jewelry and all the rights over it forever, while he takes the money for it.

Pawning, on the other hand, is more like a secured loan. When a person pawns his jewelry, he basically offers it to a pawnbroker as a security for a few months (as agreed upon by both parties). He then ensures that he pays the broker within the specified time limit, which in case he doesn’t, the broker takes possession of the jewelry and sells it off. A lot of terms depend upon the agreement between the broker and the person. The terms to agree upon is the duration of the agreement and the interest that the broker receives for the safekeeping of the jewelry. The value of the jewelry also defines just how much money the person can receive on pawning it.

It is a pretty good arrangement provided that you know a trustworthy enough pawnbroker. If you do, he’ll probably even give you a pretty good deal for your stuff. In this sort of arrangement, you get the amount of money which you need so urgently and then again, you don’t lose the possession of a piece of jewelry which has some importance to you.

Comparing the two

Here are the basic differences between pawning and selling.

  • Ownership: The person selling something loses the ownership. A person pawning it doesn’t lose possession unless he defaults on the payment.
  • Status: If you pawn your stuff, you’re technically a debtor of the broker and owe him money. When a sale is completed, there is no relationship between the buyer and the seller.
  • Time Bound: There is no binding of time in a sale. A pawning agreement is for a period of time, but can be extended.