What To Know About A Collateral Lending Business

By Author: Garrett Tarbell
Total Articles: 21
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There comes a time when we’re caught in a situation when we’re in dire need of money. It’s not as uncommon as you think. It’s actually a fact of life that affects every walk of life from a blue collar worker to white to management level all the way to CEO. Even the queen of England has money issues, except it’s usually based on the economic standing of United Kingdom.

So it’s your first and you know nothing about how to secure a quick loan. What are the things to know about borrowing money from a collateral lending business?

What’s a collateral lending business?

Unlike a bank, securing a loan from short term lending institution doesn’t require documents. The only thing you need is an item of value that can be used as collateral. Usually, because of their lifetime worth, diamonds and gold are the preferred choice of collateral. Other times they’re title loans or auto loans. And some other times they buy your items off your feet if you so desire.

And unlike banks, which has banking hours and banking days and takes a while to secure a loan, with a collateral lending business you can ...
... get your money within minutes or a max of 2 hours.

How does it work?

The transaction is usually like any kind of transaction such as buying a medicine from a drugstore. You come in. You show your prescription. The medicine is brought to you. You pay for it. And you go out.

With a collateral lending business, you come in with your item of value. The business evaluates its worth. Some haggling is done in the process. When you agree on a price, which is half the usual market value, you sign some sort of promissory note, pledging that you loaned money from them at a certain interest rate and promise to pay it at a certain settled date.

Interest rates

Quick loans usually have a slightly higher interest rate than banks, because the process is swifter and the loans are shorter. Depending on the lending institution, the interest rates are usually charged by the month. Some charge them by the day if the loans are that short, or by the week.

Duration

This solely depends on your agreement with the institution or if they have a set date on how long a loan is secured. But you can get your collateral anytime you want within the agreed duration as soon as you have the cash to pay for it.

Once the duration lapses the institution has the right to keep the collateral for their own use. Agreements are agreements. But they can’t use it prior to the lapsed date.

Collateral

As mentioned earlier, diamonds, gold and jewelries are usually the preferred collateral for lending institutions as it’s easy to assess their loan value. But residential titles, auto title loans are also accepted in some businesses.

Loan value is different from the market value. Market value is the price you bought the item or the price you can sell it. Loan value, on the other hand, is usually half the price of the market value. So don’t be surprised if the diamond ring you bought for $2000 is only being appraised at $1000. That’s usually the running rate for loan values.

So there, nothing to fear, or feel embarrassed about. Collateral lending business is just as easy as buying milk.

Biltmore Loan and Jewelry provides loans from $100 to over a million if you Sell Jewelry as Collateral. 100% Professional. Sell diamond today, call for a free appraisal!