According to the Wall Street Journal, more than 3 out of 5 Americans do not have enough savings to cover unexpected expenses such as vehicle repairs. Many of those people are unable to secure a traditional loan or use credit cards to pay for emergencies due to having poor credit ratings. Fortunately, there are ways to get fast cash, including using collateral such as jewelry.
If you are in need of some fast cash to cover an emergency expense, you may be considering using some jewelry as collateral to get a loan. Before you do, here are a few important things to understand about collateral loans using jewelry.
Your credit score does not matter and won't be affected
Since you'll be using collateral, your credit score won't be checked. Also, repayment of this type of loan, or failure to repay, will not be shown on your credit report. Therefore, even if your credit rating is good enough to get a small bank loan yet you are worried about your inability to repay the loan since you live paycheck-to-paycheck, a collateral loan is a good idea because it won't affect your credit rating if you do not pay it back.
Know the monetary value of your jewelry and how much you want to borrow
If you don't have a good idea of what your jewelry is worth, it's a good idea to get an appraisal of the jewelry before you take it to a lender. However, this doesn't mean the lender will give you what the jewelry is worth. Generally, lenders ask their clients how much money they want when they begin the negotiation process. It's important to not get a loan for more money than you will be able to pay back.
Failure to repay the loan based on the terms and conditions of the contract could result in the loss of your jewelry to the lender. Therefore, think about the possibility of another financial emergency arising during the time you will repay the loan and what you would do to continue to pay the loan while still meeting the obligations of the other financial emergency. For example, if you know you are only able to repay $250 within the allotted time frame, do not get a loan for $500 even if the jewelry is worth $1,000.
You will need to show a government-issued ID card
To use jewelry as collateral, you will need to show the lender a government-issued identification card. Most people use their driver's licenses. If you do not have a driver's license, you can use your passport. If you do not have either, you will need to obtain a government-issued ID card before a lender will give you a collateral loan. The reason for this is to verify your identification in case the authorities find out the jewelry you gave as collateral was determined to be stolen property.
There may be a hold placed on the loan
Due to the concerns that lenders have regarding stolen property, they may place a temporary hold on the loan before they give you the money. This depends largely on state laws and the value of the jewelry. The lender will likely take photographs of the jewelry as a record in case the authorities want to check the lenders coffers for stolen property they received as collateral for loans.
You may not be able to repay the loan in advance to get your jewelry back sooner
Those same concerns the lenders and authorities have regarding stolen property is a large reason why the lender may not return jewelry sooner than the terms and conditions of the contract, even if you pay the loan payments in full in advance. Before you sign the contract, be sure to understand all the terms and conditions. For more information, see a website such as http://solsjewelryandloan.net/.
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