If you need money quickly for an emergency or unplanned for expense, you may be thinking about taking out a jewelry collateral loan. A company will hold your jewelry in exchange for the loan. When you pay the loan back, in full, you will receive your jewelry back. If you fail to do so, the company will sell your jewelry to recoup their loan to you. If you have never taken out this type of loan before, you may have many questions about the process and whether it is ideal for you. Here is some information you should know before you take out a jewelry collateral loan.
Selling Jewelry Versus Taking out a Jewelry Loan
If you need money quickly, you may be unsure whether selling the jewelry or taking out a loan on the jewelry is ideal for you. Ultimately, you are the only one who can answer this question. If you have a valuable piece of jewelry that you never wear and have no interest in holding on to, selling may be ideal for you. However, if the piece is an heirloom piece that you don't wear but want to pass down to your children one day, taking out a loan against the piece may be the better option.
Generally speaking, if you want to be able to retain the piece and can afford to pay off a loan, taking out a collateral loan is ideal for you. If you no longer wish to own the piece or know you won't be able to afford to pay back a loan, selling the piece may be better for you.
How to Qualify for a Loan
One of the biggest benefits to taking out a jewelry collateral loan is that most lending agencies will not look at your credit score when determining whether or not you qualify for the loan. This is because they are receiving collateral, so if you default, they have security that they will be able to get their money back. However, this does not mean that there are still not qualifications to obtain the loan. In order to take out a jewelry loan, you must be over the age of 18, have a state ID or drivers license and attest to the fact that the jewelry is yours and you have the right to take out a loan against it.
What to Do if You're Unable to Pay Back the Loan
The last thing you should know before you take out a jewelry collateral loan is what happens should you find yourself unable to pay back the loan. Unfortunately, things you don't plan on happening may happen and you may be unable to make payments as scheduled. Before you take out a jewelry collateral loan, ask the company you are working with what happens in such a situation. Some companies offer a grace period. Other companies may give you the option of paying off the interest in order to extend the payments. Others may be strict and won't work with you if you find yourself in this situation.
Knowing what alternatives the company offers before you take out a loan will help you in case the unexpected does occur. If you know you are going to be unable to pay the loan back even with added time, or you change your mind and decide you don't want the jewelry back and you would rather keep the cash, you can call the lender and surrender the jewelry. This is your way of letting them know you won't be making payments and they can sell your jewelry to recoup the money for their loan.
If you need money quickly, deciding whether or not to take a loan out on your jewelry can be a challenging decision. On one hand, you may get the money you need and you get your jewelry back if you pay off the loan. On the other hand, you may run the risk of losing your jewelry if you find yourself unable to pay the loan back. Carefully evaluating your financial situation and learning about jewelry collateral loans will help you decide if this is the best option for you. Learn more about your options through resources like http://solsjewelryandloan.net/.