Using Diamonds as Loan Collateral

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How to Secure a Collateral Loan with Your Diamond Jewelry

If you need quick access to cash for any reason, you may consider taking out diamond-backed loans to get the money you need. As jewelry and precious stones carry so much value, you can get a fast and substantial amount of money for them when you choose to borrow against them.

Jewelry Collateral Loans

If you have valuable jewelry that you do not want to part with, but you need money due to an unexpected expense or major opportunity, getting a collateral loan could be an excellent solution. This method allows you to receive the money you need while your diamond jewelry is stored safely with the lender, and you get your item back a few months after the loan is paid back.

Jewelry-backed collateral loans are a great solution for collecting money for jewelry that you are emotionally connected to. You get the diamonds back after you repay the loan, so there is no risk involved. You get the money you need without selling special jewelry, whether the item in question is a bracelet, necklace, earring, or engagement ring. Because this scenario gives you the best of both worlds, it is a wonderful alternative to selling your diamond jewelry.

Some Popular Types of Diamonds Accepted

How to Secure a Collateral Loan with Your Diamond Jewelry - Types of Diamonds

No Credit Checks

As loans backed by jewelry are based entirely on collateral, there is no need for a lender to check your credit score or review burdensome financial documents. Even a borrower with a less than optimal credit history can receive a substantial collateral-based loan because the value of the loan is wholly tied to the piece of jewelry in question. If you cannot repay the loan, the lender keeps the diamond to pay off the debt. Because of this, diamond jewelry and collateral loans are never reported to a personal credit bureau and will never affect your future borrowing capacity with traditional sources.

How Much Cash Do I Get?

If you choose to use your jewelry as collateral, you may not receive as much cash as you would if you sold the item to a jewelry store or other resource. However, you still retain the title of the jewelry in question and do not lose that title unless the loan is not paid back within the agreed upon timeframe. This makes putting jewelry up for collateral a good solution to receive quick money for a sudden, one-time expense.

Qualified experts will examine the jewelry you want to use for collateral to determine how much it is worth. Whether you decide to put bracelets, necklaces, or rings up for collateral, the value of your jewelry will be assessed separately based on the type of metal it is made of and what kind of stones are in the settings. The quality of the stones will also be taken into consideration. If you choose to put a piece of diamond jewelry up for collateral, the following qualities will be examined:

Clarity: Because diamonds are created through carbon pressure deep inside the earth, they contain a variety of imperfections ranging from subtle to severe. While no diamond is entirely free of blemishes, those with fewer imperfections are more valuable.

Carat: This quality refers to the size of a diamond. Larger and heavier diamonds have a higher value.

Cut: The shape of the diamond affects how it interacts with light and sparkles, therefore having a direct impact on the value of the gem.

Color: Most diamonds have faint tinges of color to them. Clearer diamonds are worth more than those with slight color variations.

When you choose to take out a diamond-backed loan, these qualities affect the amount of money you can receive. The most significant advantage of choosing this method to collect money for your favorite fine jewelry is that the jewelry is only gone temporarily. You have multiple options for loan repayment to get your item back.

Selling vs. Pawning Your Diamonds

If you choose to sell your diamond jewelry, then the piece is no longer yours. While selling the diamond perhaps allows you to receive more money, you do not keep the title to the jewelry, so it may not be a good solution if you are attached to the diamond.

There is no financial risk involved when you choose to sell a diamond. The transaction can be made quickly and efficiently in less than 24 hours, so if you no longer want to keep the item of jewelry in question, this method can be an excellent way to secure cash quickly.

Another advantage to selling diamonds rather than putting them up for collateral is that there is no debt involved. There is no loan to be paid back and no interest accrued, so there is no risk involved.

Have Questions? Contact Us Today!

If you need money quickly and have a piece of diamond jewelry that you do not want to sell, consider using it as loan collateral. You can receive a substantial loan while retaining the title for the jewelry you are emotionally connected to. Contact Pawngo for more information about the kind of loan you can get for your diamonds.