Facts to Know Before Getting a Collateral Loan in Phoenix, AZ

Getting approved for a loan is much simpler if you have a significant asset to back it up. Here at Biltmore Loan and Jewelry, we offer borrowers the best value on, but not limited to:

  • Diamonds and other gemstones
  • Jewelry in any arrangement
  • Estate jewelry
  • High-end timepieces or fine watches
  • Gold, silver, platinum, and other precious metals
  • Artwork
  • Antiques and collectibles
  • Sports and music memorabilia
  • Designer handbags

If you own one or more of these authentic valuables, we welcome you to do business with us. But first, allow us to provide you with more information about asset-based loans. Our goal is to help you better understand how collateral loans work and determine if they are right for you.

Here are three things you should know about collateral loans in Arizona.

  1. Collateral loans are 100% secured

With more conventional loans, it is common for banks and lenders to review your credit and income to determine your capacity to return the money. This process often puts pressure on lenders because they can bet incorrectly on whether you can pay them back. And as a borrower, you may develop extreme anxiety from incessant calls from the lender — not to mention the rare but possible chance of a lawsuit.

A collateral loan helps to ease some of that stress on both lenders and borrowers. With an asset-based loan, you are offering a high-priced item or property as collateral. If you can no longer reimburse the amount your borrowed, lenders can extract their money from the collateral you offered. As such, this personal loan is often referred to as a secured loan.

  1. The amount you can borrow depends on your asset

How much money you can borrow with a collateral loan varies. Much of that variance depends on the market cost of what you offer.

For example, if you offer your authentic Hermes Birkin or Cartier Diamond-encrusted jewelry as collateral for a loan, you could expect anywhere from a few thousand dollars. Putting up more expensive assets can increase that amount significantly, but bringing in a $50,000 vehicle does not always mean you will walk out with that same amount in cash.

When we test the asset you are offering, understand that we will most likely arrive at a competitive figure that still considers current market prices. This provides us with additional safeguards against fluctuating markets. Call us now at 480-991-5626 or 480-705-5626 if you wish to borrow from us and learn about our lending limits.

  1. Having a good credit score is not a big factor

Collateral loans are beneficial to those with subpar credit scores. If your attempt at getting a loan has been less than satisfactory because of credit-related matters, collateral can bridge the gap for lenders like Biltmore Loan and get you the money you need.

If, on the other hand, you can secure a bank loan with collateral and pay it back responsibly, doing so will help to improve your credit. And as your credit score builds, you become more eligible for future loans with favorable terms.

Weigh the Pros and Cons of Collateral-Based Loans

Using a collateral loan can be an efficient way to borrow money, but there are certain pros and cons you need to consider before deciding whether this option is best for you. The benefits of a collateral loan are:

  • You have a high chance of getting approved. Have you been having a hard getting a loan because of credit issues or a short credit history? Securing a loan with collateral reduces your risk as a borrower and ultimately improves your likelihood of getting approved.
  • You qualify for loans with larger sums of money. Likewise, since you are reducing the lender’s risk by offering something of equal or more value, you might be eligible to borrow more than you could otherwise.
  • Collateral loans provide short-term liquidity. If a large amount of your money is in assets that are not easy to convert into cash, such as land or property, a collateral loan is an excellent way to get your hands on money without having to endure the tedious process of selling your assets.

In contrast, there are a few disadvantages that you must consider before getting a collateral loan in Scottsdale or Chandler, AZ:

  • You can lose your collateral if you do not pay the loan back. The apparent risk of a collateral loan is losing the asset if you fail to repay the money and interest you owe. A collateral loan is especially risky if you secure it with a valuable and essential asset, such as your home.
  • You need to present a substantial asset. Another possible issue is that you must have something of high value to offer as collateral from the very beginning. With an unsecured loan, which is what most people apply for at banking corporations, you can borrow money without needing to offer anything in return – except for your credit score. If you are unable to qualify for this type of loan, you need collateral to secure one instead.

A collateral loan is important if you need money as soon as possible. Just remember the importance of reviewing all the risks and rewards it comes with. Ensure to borrow from reputable organizations or lenders, and have a thorough plan for meeting your payment obligations to prevent losing your collateral. Doing these things will set you up for financial success in the future.

Why Choose Biltmore Loan and Jewelry

We have been in the collateral lending business in Arizona since 1994. Our expert appraisers and buyers provide clients with loans on jewelry, high-end collectibles, and other personal assets that have significant value. The staff here at Biltmore Loan has over 75 years of combined experience in the diamond and jewelry industry, and have built a respected reputation based on honesty, integrity, and trust.

If you have collateral, we can provide the cash loan you need. Contact us now to get started.