If you need a quick and convenient loan without saying goodbye to your favorite jewelry pieces for good, Biltmore Loan and Jewelry gives you the option to do precisely that and more. Your fine jewelry can serve as collateral for a loan in Phoenix, Arizona, allowing you to access the funds you need without selling your Cartier Love, VCA Alhambra, estate jewelry, and others. And, whether it’s an engagement ring passed down for generations or a rare collectible you picked up on your vacation in Paris, your jewelry could provide the financial assistance you need.
This article delves into the ins and outs of using jewelry as loan collateral and how this option allows you to secure the money you need for a business venture, to pay off unexpected bills, or for other reasons. But before we dive into the benefits, let’s define collateral loans.
What Is a Collateral Loan?
This type of loan requires the borrower to pledge an asset, such as a car, house, or jewelry, as collateral to secure a loan. The lender holds onto the asset until the borrower repays the loan in full, providing them with a sense of security in case the borrower defaults. Think of it as a game of trust, where the borrower puts up something of value as a guarantee that they will repay the loan, and the lender accepts that guarantee as a way to minimize their risk.
Benefits of Using Jewelry as Collateral for a Loan
Here are the top reasons to use your jewelry as collateral:
1. Access to Funds Within 24 Hours
From 18K gold pieces to platinum beauties, when you use your jewelry as collateral for a loan in Scottsdale, Arizona, you can access funds as quickly as the same day you apply. To compare, traditional bank loans require meticulous credit score checks, income verification, and lengthy application processes. Moreover, you need to compile, review, and sign endless piles of paperwork. Completing these steps can take several weeks or even months, making it a daunting option if you need cash immediately.
On the other hand, a collateral loan has a less complex, more straightforward, and streamlined application process (it’s so quick that you may not even call it an “application.”) Since collateral helps secure or back up a loan, lenders may not give as much importance to your credit history or pry about your capacity to repay the loan. As long as your collateral meets the lender’s requirements, they can grant you a loan within a few hours.
Furthermore, when providing a lender collateral as valuable as high-end jewelry, the lender may be more willing to take on a higher risk level than with an unsecured loan. In other words, you can acquire a collateral loan using jewelry, even if you don’t have the best credit score.
2. Higher Appraisals and Loan Amounts
Using jewelry as collateral for a secured loan provides access to higher loan amounts than traditional bank loans.
With unsecured loans, lenders typically restrict the amount of money they lend based on the borrower’s monthly/annual income, number of years employed or in business, credit history, and other factors. Unfortunately, failing to meet the lender’s standards or criteria can limit the amount of money you can borrow. In contrast, with a collateral loan, the lender may be willing to offer you a more substantial amount since providing collateral reduces their risk of losing money.
The loan amount available when using jewelry as collateral will depend on the market or resale value of the piece. For example, here at Biltmore Loan and Jewelry, we will appraise your pieces to determine their worth and offer a loan amount based on a percentage of that value.
3. Lower Interest Rates
A main selling point of using fine jewelry as collateral is the possibility of getting lower interest rates. Compared to borrowing without collateral, letting a lender hold on to your jewelry until you can repay the loan in full (or relinquish ownership if you default on the loan) reduces the risks of lending. Since the lender’s risk is lower, they may be willing to offer you lower interest rates.
In comparison, an unsecured loan does not include collateral, making them significantly riskier for lenders, especially large banking corporations. Money lenders need to take into account the same factors mentioned earlier, including your overall debt-to-income ratio, when deciding on interest rates, as the lender cannot recoup the amount without collateral from your end. As a result, in most situations, an unsecured loan has higher interest rates to compensate for any losses in case you cannot pay them back.
4. Flexible Payment Terms
Due to the above explanation (reduced risk for the lender), using jewelry to get a collateral loan, can enable flexible payment terms. You may even have the option to choose a longer repayment term with lower monthly costs, making it easier to manage finances. Some lenders may also offer interest-only payments for a period of time, allowing you to delay paying off the principal until later.
In addition, some collateral lenders may offer the option to repay the borrowed amount early without incurring a prepayment penalty. This option is highly beneficial to borrowers who have the capacity to repay the loan ahead of schedule, saving them money on interest charges.
5. Reunite With Your Jewelry
During a financial emergency or crisis, it can be tempting to sell your jewelry for fast cash. However, you may end up selling your jewelry for less than what it’s actually worth, and you may regret the decision later on. Instead of selling and saying goodbye forever, a collateral loan allows you to collect the money you need without selling pieces from your collection. As long as you stay on track of your income and expenses and remain diligent about repaying what you owe, you will regain ownership of your beloved investment pieces.
What are you waiting for? Get a same-day personal loan using jewelry as collateral. Get an online appraisal here or visit us today to complete your loan application within hours.