3 Reasons Why Jewelry Loans Are An Ideal Choice

Posted on: 25 April 2017

If you need cash quickly, you should seriously consider getting a jewelry loan. Rather than use a credit card or something else with high interest, a jewelry loan is a smarter and safer way to get an advance on cash. Here are some reasons to get a jewelry loan.

1. Because Of Collateral, You Get A Better Interest Rate

How a jewelry loan works is that you take your jewelry to a pawnshop or another shop that offers loans, and you will trade in your jewelry for cash. You can sell the item if you want, or you can just pawn it. When you pawn it, the dealer will use the piece as collateral. This means that instead of paying a super high interest rate, like you would with a payday loan, you get a much better rate on the loan. The jewelry then acts as collateral against the loan and lowers the amount interest that you would pay on the amount. It should be noted that if the item is worth $5000, for example, you probably won't be loaned that full amount; instead you will probably be loaned a percentage of what the item is worth.

2. Jewelry Is A Non-Essential Item

Another reason that people really like jewelry loans is that they are pawning something that isn't an essential item. The majority of jewelry pieces hold a good deal of sentimental value because they are generally given as gifts, but the person does not necessarily need them. This makes it an ideal item to pawn when you need cash. If it is between protecting your finances and credit and keeping something that is sentimental to you, it is better to choose the finances.

3. If You Default, It Doesn't Ruin Your Credit

Lastly, jewelry loans are ideal because they don't have to go on your credit report. Many times when you pawn something, it is between you and the pawnshop, or jewelry dealer, and no one else. This means that if you aren't able to pay off the loan, the dealer simply keeps the jewelry and sells it to pay off the debt. This is unlike a payday loan or a cash advance that could essentially trash your credit score and credit history if you default. Thus, it is a much safer option for your finances than any other type of loan.

As you can see a jewelry loan is a great option when you need cash fast.