Today, putting forward goods as security for general short-term loans is becoming a commonplace arrangement between loan brokers and their clients. This arrangement indeed holds benefits to both lenders and their clientele in need of short-term capital quickly, and this article aims to focus primarily on the benefits to the client.
Pawn Brokers and many other short-term money lenders are using what are considered ‘Security Loans’ – or the process of accepting valuables in exchange for short-term loans – because it provides the lender with added security in case of loan defaults by their clients, and gives the client the peace-of-mind knowing they will not be legally liable in the case that they wish to keep the loan amount already recieved, accepting the default scenario of releasing their valuables to the broking party. For the client who is contemplating the sale of particular valuables but is not yet sure they’d like to commit to this, this may provide a good opportunity to simulate the sale of that particular item as well as allowing them to verify the need of the exchanged for capital. If the client chooses to, by simply fulfilling their part of the loan requirements, they can receive the item back in any case.
A major benefit for clients loaning against their valuables is the ability to fast-track loans to the point of instant cash-based and/or bank transfer payouts. A fast-tracked loan is the result of decreased emphasis on the applicant/individual verification and approval process, which quickly becomes more straight forward in the case of adding security to a loan. The brokers will still need identification to a degree, but credit history checks are no longer a salient part of the approval process as the insurance now rests upon the valuables that the loan is being secured against.
Our top 5 benefits of loaning against your valuables include:
- Fast tracking the loan process
- Credit History becomes superfluous
- Limited emphasis on formal identification (although still important)
- Allows you to simulate the sale of a good, releasing it to the Pawn Broker if you do decide to sell it and hold on to the remuneration value
- You can secure loans with a range of valuables such as jewellery (gold, silver and platinum), rings, watches, bracelets, necklaces and earrings, cars, boats, jet-skis and automobiles, camper trailers and many more.
And remember, to make the most of a loan transaction with your broker, before you loan against your valuables, it’s always good to consider the value you hold on a personal/emotional level to any items offered as security. Another good consideration is to make sure you’ve the means to be able to fulfil your obligations of the loan so that you may receive your security deposit item/s back at the end of the transaction if that’s your intention.