Traditional bank loans are a popular go-to choice if you are seeking a loan but deep down we all know how cumbersome the process is! Luckily enough there are numerous other types of loans where the requirements to get them are not as strict as traditional bank loans! The one that tops the list is, Collateral loans – such as a loan on watches, like a Diamond Rolex or other luxury watches.
What exactly is a Collateral Loan?
Also known as a secured loan, a collateral loan involves a borrower who pledges an asset to obtain a loan. The loan amount depends on the collateral value. And with this, lenders relatively have no risk due to them being able to liquidate the assets to recover the loan amount of a defaulted loan. Also, the borrowers may obtain approval for higher loan amounts at lower interest rates because these loans are secured.
How Do Collateral Loans Work With Watches?
A loan on a watch is used as a guarantee for the lender. The watch’s value determines the loan amount. The borrower will go through an easy, quick, and convenient application process. That is done by the lender having an online form for you to complete, or the lender may allow you to come to their office or call them.
After completing the application and submitting your luxury watch, whether it’s a Diamond Rolex, Patek Philippe, or something else, the lender will appraise and evaluate the item. Then, this professional will give you an offer of a loan amount based on the watch’s value.
If you accept the offer, the lender will keep your watch in a secured area for the loan duration. Also, the lender will release the watch in its original condition once the loan is settled.
What are the Types of Collateral Loans?
Individuals and businesses must know the different kinds of collateral to use when borrowing. So, without further ado, the following are the different types of collateral loans:
1. Real Estate
Like a parcel of land or someone’s home, real estate is the most common form of collateral. These types of properties come with low depreciation and a high value. However, there can be a risk if a property is concealed and thus can’t be taken back.
2. Cash Secured Loan
Here is another common form of collateral! Cash is extremely easy to work with. A person can obtain a loan from a bank if they have an active account. And if the collateral loan defaults, the bank can recoup the borrowed money by liquidating their accounts.
3. Inventory Financing
Inventory can serve as collateral for a loan. And if the loan defaults, the lender can sell the inventory items listed to recoup its loss.
4. Invoice Collateral
Small businesses can use their invoices as collateral for outstanding customer invoices.
5. Accounts Receivables
Account receivables are invoices due in 30 to 60 days, and they can be used as collateral. Also, this collateral is usually security for short-term loans. Accounts receivables are considered solid security to lenders because of their liquidity.
Financing of asset-based equipment is the use of equipment used as security. Businesses may use this technique to obtain quick cash based on their current collateral. Also, these businesses want to buy or refinance with a substantial down payment.
7. Collaterals in Finance
The asset-based financing foundation is also collateral. Alternative investment offerings can be the pledging of various types of collateral.
8. Interest Rates and Collaterals
When a loan is structured as a secured loan, there is a reduction of the lenders’ repayment risk. With collateral included, the risk would be considerably lower, as well as the interest rate.
What Benefits Does a Borrower Receive With Collateral Loans?
There are different benefits to getting a collateral loan. One of the benefits is that it is usually simple to get. Secondly, it is quickly approved. Also, the borrower may usually ask for more money than they could with an unsecured loan. Another advantage of these secured loans is that you are not required to have perfect credit to get approved for these loans. However, this is not the case when applying for an unsecured loan.
With unsecured loans, the lender would access the income of potential borrowers and have caps on the loan amounts. The caps would be at the point before there’s too much risk. However, collateral loans don’t have such problems because the lender may claim ownership of the borrower’s property if the person doesn’t pay. With this fact, there is very little to no risk. And with basically no risk, lenders tend to be more willing to lend vast amounts of money, provided that one can sell the borrower’s property to pay off the collateral loan.
Some Tips for Getting a Loan on Your Luxury Watch
To successfully obtain a loan on your luxury watch, you should adhere to the following tips:
- Before applying for a collateral loan on your Diamond Rolex or another luxury watch, you should know the amount of money you need and how much your luxury watch is worth. The lender will consider the watch’s model, condition, age, materials, and authenticity to factor in the watch’s value.
- Please note that all watches are not authentic. It’s tough to obtain a loan with a counterfeit watch as your collateral. Also, fake watches range significantly in quality. People can spot some counterfeits by comparing them to another similar watch brand or closely looking at the watch. Sometimes, a trained eye will spot the difference between a knock-off and a genuine Diamond Rolex. The modern counterfeit may look precisely like the real one on the outside. Also, hand-painting the colored wheels in the watch movement to make it look genuine on the inside is done by counterfeiters.
- Make sure the watch is in the best possible condition. An essential factor in obtaining all the money needed when acquiring a collateral loan on a luxury watch is its condition. The most valuable watch will be free of dents and scratches, and it will run smoothly. Also, the watch would no longer be waterproof if one had opened it. It can be resealed, however, at a nominal charge. Also, making sure the watch is clean and possibly polished before bringing it in for a loan would go a long way in securing a loan.
- Bring the entire package to the lender. So, bring in the original box it came in and the papers it came with. An authentic luxury watch is worth hundreds of dollars more when you have all the original packaging, documents, and receipts. These details would make a huge difference when attempting to get the largest possible loan on your luxury watch.
- If you get an offer for a loan that is lower than you expected, you can counter-offer and settle for some loan price in between the negotiating process. Also, obtaining a loan on a watch that is higher than you need means paying higher interest fees.
When it comes to getting a loan, collateral loans are the way to go. A collateral loan is a secured loan that involves a borrower who pledges an asset to obtain a loan. The loan amount depends on the collateral value. And with there being relatively no risk to the lender with these types of loans, the borrowers may obtain quick approval. Also, these loans would be for higher loan amounts at lower interest rates.
Contact Diamond Banc today for more information and get the best loan possible. For over 100 years, we have been providing top-notch financial services in liquefying jewelry as well as selling high-end jewelry. The staff at Diamond Banc will be more than happy to assist you.
Diamond Banc makes it very convenient in the application process. All you have to do is complete a short, convenient online form, and you can upload pics of your watch. Just make sure your watch is a premium brand, such as Omega, Cartier, or Rolex. Also, have all your paperwork for your watch ready. You can borrow a maximum of $500,000 within 24 hours upon securing your watch with them. And with this company being a company that keeps on giving, you’ll also get the following:
- The lowest borrowing prices in the US
- Credit line flexibility, where you can borrow as needed
- Payments that are more than the minimum interest are applied to the balance of your loan.
- Giving free, digital reminders
- Have automatic payment availability
- Insurance on the items while in their possession and while in transit
Also, Diamond Banc has several locations throughout the nation, including Tampa, Miami, Boca Raton, Palm Beach, Nashville, Sarasota, Roswell, Orlando, Charlotte, Columbia, Kansas City, and Rochester. You won’t go wrong with Diamond Banc, so contact us now!