Top 7 Reasons to Get a Collateral Loan in Phoenix, AZ

Modern life is so expensive that borrowing money has become a survival tactic for many. In fact, whenever an acquaintance or estranged relative slides into our DMs with a simple “Hey, how are you?” – too many of us expect “Can I borrow money? I promise to pay you back ASAP” as the follow-up message.

Money matters. Unfortunately, there are times when we don’t have enough for life’s twists and turns. But rather than borrowing from friends and family – and potentially ruining relationships – a collateral loan offers a lifeline.


Reasons to Get a Loan in Phoenix, Arizona

Don’t fall into a debt trap. Knowing the top reasons for collateral loans can also help you decide whether you’d benefit from quick funding in Phoenix, Arizona.


1. Debt Consolidation

Consolidating debt is one of the main reasons people opt for collateral or secured loans. Unlike credit cards, which carry an average interest rate of 28 percent, the average secured personal loan interest rate hovers between 12 and 15 percent. The latter offers you the potential to save hundreds or even thousands of dollars on interest payments.

Collateral loan rates are often fixed, providing predictability compared to the fluctuating rates of credit cards. Here at Biltmore Loan and Jewelry, your loan has a clear pay-off date, as you can repay it in equal installments over fixed terms. This fixed term and lower interest rate combination can lead to substantial savings. Moreover, you only risk losing your collateral if you default on the loan. Read Are Collateral Loans Right for You? for more information.

When you consolidate your debts by using a loan to pay off multiple other loans or credit cards, you’re essentially merging all those outstanding balances into one monthly payment. Another advantage is that paying off revolving credit card debt can improve your credit scores by reducing your credit utilization ratio.


2. Medical Emergencies

Up to 43 percent of Americans burdened with credit card debt say it’s because of emergencies, including unexpected medical bills.

If you don’t have health insurance or an emergency fund to cover unplanned medical expenses, the costs can quickly add up. A collateral loan can help pay for hospital stays, medications, and other necessities.

A word of advice: It’s best to divide the expense of an emergency between a collateral loan and your emergency savings. By doing so, you can maintain a safety net in your savings account while also reducing the amount you need to borrow, giving you peace of mind and a smaller loan balance to manage.


3. Moving Costs

Are you moving out of your parents’ house? Relocating for a new job? Or perhaps you’re moving out of your ex’s place? Having enough money can make the moving process less stressful.

A local move can cost you between $880 and $2,545, while a long-distance move ranges from $2,700 to $10,000. If you don’t have that amount of money in your savings, a collateral loan is a practical solution to cover moving expenses.

With a collateral loan, you can use the funds to pay for moving trucks, new furniture, and perhaps transporting your vehicle across the country. It can also help bridge the gap if you’re waiting for your first paycheck after relocating for a job. Using a collateral loan for moving costs also keeps your savings intact for other necessities, including groceries or cleaning supplies for your new home.


4. Tuition Fees

Education is a worthy investment, whether to advance your own career or secure your children’s future by funding their college education. In 2013, Maggie Wong, a homemaker, told The Wall Street Journal that she often used her designer bags as collateral for a loan. She then used the money to pay for her child’s tuition. “I have no time for my local bank’s long and complicated application procedures,” she said.


5. Wedding Expenses

The average couple will spend approximately $33,000 on their wedding in 2024. If your wedding date is approaching and you haven’t prepared nor saved up, choosing a secured loan provider in Scottsdale, Arizona, allows you to cover the costs upfront and repay what you owe later.

Depending on the scale of your dream wedding, a loan can cover the bulk of your expenses, from the venue and bride’s dress to flower arrangements, photography, the cake, or hiring a wedding planner. It can help turn your wedding dreams into reality.


6. Pregnancy, Labor, Newborn Expenses

Preparing for pregnancy, labor, and caring for a newborn is expensive, especially in this century. From OB-GYN checkups to hospitalization fees and essentials like diapers, becoming a parent comes with hefty financial obligations that can accumulate quickly, making it absolutely crucial to plan ahead. Mind you, the average cost of vaginal delivery alone is $13,024 without insurance.

Exploring your financial options early on can help you focus on the joy of parenthood without worrying too much about money. For example, if you own handbags from top brands like Hermès, Chanel, Louis Vuitton, Dior, Gucci, and other designer fashion houses, you can use them as collateral for an instant loan in Chandler, Arizona.


7. Home Improvement Projects

A collateral loan is a savvy choice for homeowners looking to spruce up their property without tapping into their home’s equity. This option is especially beneficial for those who’ve invested in luxury bags, jewelry, and other valuables, but may not qualify for a home equity line of credit (HELOC) or loan.

Unlike home equity options, our collateral loan services don’t require you to pledge your home. Instead, we accept designer handbags, jewelry, timepieces, and other luxury goods. We are also willing to grant loans to individuals with less-than-ideal credit scores.

Further reading: Pros and Cons of Collateral Loans


Do You Really Need a Loan? When In Doubt…

Ask yourself: Are your reasons sensible, necessary, and urgent? Answering honestly can help determine if you need a loan. If ‘YES’ is your answer to either or all three, get a secured loan with a low-interest rate and fixed repayment term at Biltmore Loan and Jewelry. Request an online appraisal or bring your valuables to our office in Scottsdale or Chandler, AZ, to end the day with enough funds for your needs.