Are you in need of cash for a business opportunity or life event? If you have gold items, getting a personal loan with gold as collateral can be a quick and simple solution.
What Kind of Gold Can Be Used?
Gold comes in many forms, including:
- Bars called bullion
While many of these forms can potentially be used as collateral, jewelry is typically not valued as highly as bullion and coins. Bullion is prized for its ease of liquidity and coins may have historic or cultural significance that adds to their value. The worth of your gold is also dependent upon its purity, with purer gold deemed more valuable.
How Does the Loan Process Work?
While the actual loan process and funds dispersal tend to be relatively quick, the number of lenders willing to underwrite gold collateral loans is limited. However, such loans are still fairly accessible, as some lenders can facilitate online applications.
To begin, you’ll have to be sure that whatever item you’re using as collateral is one you can part with for an extended period of time. Unlike some collateral loans, such as home equity and many vehicle loans, you won’t have possession of your gold for the duration of the contract. Instead, the lender will keep the items in a secure facility as part of your agreement and return them at its conclusion.
You’ll also have to think about the amount of cash you’re hoping to receive. The Loan to Value (LTV) of these arrangements tends to be low compared to other loan types to ensure minimal risk for the lender and a low interest rate for the borrower. Typically, the LTV is between 50 percent and 70 percent of the gold’s current value, which will be determined by experts as part of the lending process.
Why Get a Loan Instead of Selling?
Opting for a loan over sale has several benefits, such as the following:
- No tax event, which can be triggered when selling
- Retained ownership of items
- Increased value of gold upon regaining control due to yearly market gains
Selling can end up losing you money in the long run, especially if you buy gold later at a higher price.
If you’re looking for a gold collateral loan, the Lux Exchange offers cash without the hassle. You can submit an application online to receive a no-obligation initial offer. If you approve, you can ship the item to us at no cost for evaluation. If you accept our final offer, we’ll hold your valuables in a secure facility for the duration of the loan. For more information or to start your application, visit us online or give us a call at 1-844-280-0930.