Using jewellery to secure credit: what you need to know

In these austere times, many people will wish they could access more finance in order to make their lives easier. Whether they dream of using it to launch a new business or simply to purchase items for the home, a sudden cash injection would undoubtedly be welcomed by many of our readers.

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Unfortunately, this period of squeezed wage packets also coincides with banks being less willing than ever to lend funds. You may therefore have found yourself in something of a catch-22 situation – without sufficient disposable income to afford what you want, but unable to get a loan for it either because banks can see you don’t have much money left at the end of each month.

One solution for those with valuable assets is to make the most of them by seeking out a secured loans provider and taking out finance this way.

Jewellery is ideal for this purpose, as it tends to be among the most valuable items that any of us have at home. You may not be willing to part with your family heirlooms permanently, but using this type of jewellery as security will free up its value while also ensuring you can get it returned to you immediately after you have repaid the loan.

Here’s our basic guide on everything you need to know about securing credit against jewellery.

Top jewellery items you can pawn

It’s possible to take out a secured loan against almost anything that is decorative, from earrings and necklaces to watches and diamond rings. As a general rule, look to use things that you know have a high value first, because these will ensure you can access a greater amount of cash in the corresponding loan.

You will probably find that jewellery featuring gemstones will be worth more due to the value of diamonds and other stones, although platinum and white, yellow or rose gold should also be able to raise a substantial sum.

If you are unsure about whether or not you have genuine metals, look out for hallmarks that certify purity. A good online pawnbroker will typically lend up to 70 per cent of the resale value for jewellery.

Advantages over selling

The main advantage of taking out a secured loan against jewellery over selling it is that as soon as you have repaid the loan, your lender will send the piece straight back to you. This means you do not have to lose a previous heirloom, but you can still free up its value and make use of the cash it holds.

In addition, there is no limit to the number of loans you can take out on any given item of jewellery, as long as you pay each one back. By contrast, you will only receive one sum of money if you sell.

Finally, secured loans are likely to provide more cash than selling because they focus on the true value of the jewellery as opposed to market trends and personal preferences of buyers.

How your jewellery will be stored

If you do decide to take out a secured loan against your jewellery, there is no need to worry about its safety as long as you choose an accredited lender with a good reputation.

Look out for those that offer secure courier services or send experts to your home to pick your items up, as well as those that offer insurance just in case.

In addition, you should also check out on-site secure storage facilities before you select your loan provider. Features such as CCTV, underground vaults, steel cages and barcoding will all give you peace of mind while your items are away from your home.

You can then begin repaying the loan and look forward to receiving your jewellery back once you have finished.

To find out the more about the value of diamonds and other jewellery you possess or to enquire about taking out a secured loan, click here.