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Tips to get a loan against your Diamond ring

by Shawn William Creative Writer


Photo by Pexels on Pixabay

Getting a loan against your diamond engagement ring, or any other piece of jewelry, can be a smart financial move. These loans are also known as collateral-based loans and are usually offered by banks as an extension of credit that can be used for a specific purchase. Avoiding the embarrassment of having to return the engagement ring is one of the main reasons why many people choose to get a loan against their ring instead of selling it outright. Let’s take a look at some things you need to know about collateral-based loans so you can weigh your options and find the best deal.


What you need to know about collateral-based loans

Loans against jewelry, cars, and other personal property are a common practice in the banking industry. Banks are willing to offer lower interest rates and longer payment terms on jewelry loans because the lender has a high chance of recovering the loaned amount if the borrower is unable to repay the loan. Most banks will allow you to borrow against your engagement ring, but some may not take other types of jewelry. When taking out a loan against your ring, you’ll be required to put up your ring as collateral, meaning a bank will hold onto the ring until the loan is fully repaid.


How much can you get?

If the value of your ring will cover the loan amount and leave you with a reasonable payment amount, then this is an option worth considering. But if the loan amount is based on the resale value of your ring, then you’ll want to make sure to get a decent price from a jeweler when you sell the ring. The amount you can borrow against your ring will vary depending on the state of the market for diamonds. If the market for diamonds is high, you’ll be able to get a higher amount of money for your ring. If the market for pawn shop diamond rings is low, you’ll be able to borrow less. Some online lenders let you see the current market value of the ring through their website. This can be a helpful way to estimate the amount you’ll be able to borrow against your ring.


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About Shawn William Advanced   Creative Writer

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Joined APSense since, December 14th, 2016, From California, United States.

Created on May 22nd 2022 01:52. Viewed 147 times.

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