Frequently Asked Questions: On Collateral Lenders

By Author: Garrett Tarbell
Total Articles: 21
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Getting married? Having a baby? Buying a house? Whatever reason you may have to need money immediately, a collateral lender can purchase your items or provide you with a loan using your valuables as collateral.

But first, what is collateral? In the most basic terms, collateral is a guarantee or pledge as a security for repayment of a loan. A collateral is something valuable to you - no, not the lock of hair when your child had his first hair cut (those are considered priceless items *wink*) - but an asset or property.

Types of Collateral

There is a broad range of assets you can use as collateral. Physical assets such as cars, houses, memorabilia, jewelry, precious metals, etc.

Lenders are taking a risk when they lend you money - a risk because they don’t know for sure when and if you’re going to pay, so collaterals come in handy to ensure you can meet your payment deadlines. It has to be equal to both parties - they’re going to risk something, so better you risk something too.

Here are some of the frequently asked questions lenders get when they have clients who’d like to loan or sell ...
... their items to these upscale collateral lenders.

What type of items are accepted for loan or purchase?

Almost all items of value are accepted. This includes lending or purchasing items such as precious metals (gold, silver, platinum), diamonds, fancy, scrap, or estate/antique jewelry, auto titles including boat, rv, motorcycle, artwork, coins, high end electronics, sports memorabilia, antiques or collectibles, etc. If you have any assets you think has value, then don’t be scared away and contact your trusted lender to appraise the value of your item and how much you can get for it.

How much can someone borrow for a loan?

Depending on your asset, these are appraised and evaluated by expert appraisers. Don’t be fooled by fly by night appraisers, check your local directory sites for referrals and good honest reviews of collateral lenders.

How does it work?

In order to commence your loan, your assets are inspected, appraised, and a value is set for it. Once this is established, basic paperwork must be done, and information on the loan terms is divulged. Just sign the contract and your money is given.

How long are loan terms?

Depends on you, really. You can opt to take a yearlong loan, something to last several years or something as short as 1 month.

Is there interest to be charged on the loan?

Of course there is, but it is negotiable and will depend on the amount of your loan and duration. The interest for loans is set by each state. But each collateral appraiser can set a consumer friendly rate to get more customers.

The above mentioned is just the tip of the iceberg when it comes to collateral lenders and loans. A word of advice: when looking for a collateral lender, look for one with a good reputation, as well as a solid foundation of experience in the industry. Honesty and integrity are also things you should look out for in a collateral lender, because once you have those, then you know you can trust them regarding the confidentiality of your loan.