Do you possess luxury assets like some gold jewelry, diamond ring, collector car, yacht, or luxury watches? Well, if you do, then you might not know that you can actually use it as source to get some quick finance!
One of the most desirable and common ways to get quick access to some extra financial fund is by getting a loan. No matter whether you are planning a vacation, want to g for home improvement project, or working on the debt consolidation, a reliable loan can really help you in managing cost and offer you financial flexibility that you need.
However, it is important to get a collateral loan only from a reliable and reputable loan provider like Lux Exchange. Collateral loans are even referred to as secure loan. It is basically extended by financial entity in lieu of any asset you own. Through this kind of loan, you agree to offer one or multiple of the luxurious assets that you own to lender as guarantee of the payment. Let us explore more about this kind of loan in the following section.
Who uses collateral loans?
An acquirer or owner of luxury asset that wants to increase their liquidity can take this kind of loan. Investors in such luxury assets can easily borrow money against them for growing their collections. On the other hand, dealers in the luxury assets can easily increase their liquidity and inventory. There can be times when challenges or opportunities arise that may require cash quickly. At such times, owners of the luxury assets use their assets for raising cash to capitalize new opportunity like real estate investment or to purchase assets at auction.
How collateral loan works?
The lender or a lending company offering this kind of loan appraises asset. They might or might not even need particular storage requirements. Once it is appraised, then the maximum amount of the loan is advised. After the terms and loan size are agreed upon, funds are then sent to borrower in pre-decided time duration. This loan can be considered as non-recourse loan. So, the asset’s value decides the loan instead of the borrower.
The capital’s amount to be raised will be dependent on asset’s value. In short, a specific percentage of value of asset is advanced to lessee. Generally, it is 70 percent for the jewelry, diamonds, and luxury watches and 50 percent for other assets.
Why you too should go for collateral loan?
• Collateral loans come with much lower interest rates as your lender will be in safer situation. In case you will fail to pay the loan off, then the lender will likely take ownership of asset you own.
• Employment isn’t a necessity here. While regular loans need you to have secured job, the lender that is extending collateral loan may prove to be more forgiving.
• Credit history won’t be quite an impact on this kind of loan.
For the beginners, many lending institutions may inspect assets before they approve them as collateral for loan. If you too want some quick cash in exchange of any luxury asset you own, then this kind of loan is ideal for you!