In countries where gold is very well loved and commonly held by the people, loans that use the precious metal as collateral are also pretty common. If one would want like to take up a loan but does not carry any assets to use as collateral, then this precious metal can be used in its place. For those who are curious to know how this type of loan works, here are a few facts on Gold Loans Dunedin FL.
These types of debt are actually most common in India because of the high demand for this metal. However, many other countries such as the US or the UAE offer this type of deal. The great thing about this type of loan is that it is quick to process since this precious metal already has a value in the commodity market, making it very easy also to liquidate.
The process of acquiring this loan is extremely simple. All one has to do is pledge to have a piece of golden jewelry, bullion, or accessory as the collateral to the loan which will be given to the lender in the event that the borrower cannot pay. One very important thing to take note is that the loan amount to be given to the borrower is only a percentage of the fair market value.
Of course, the item also has to be valued and appraised. Some of the things that have to be taken into consideration would be the karat of the piece as well as the weight. It is from this appraisal that the lender will determine the value of the piece and give a proposal to how much he or she can give the loan for.
These kinds of debts though, are usually very short term loans. They would usually have a period of around two months to about a year depending on the agreement of the two parties. Of course, there are some people who would drag on the loan to about a few years but the loan rarely gets dragged to up to five years or so.
Being backed by an international standard, the processing is fast since golden items can be turned into cash extremely fast. Due to that, loans like these also have really low interest rates since it is extremely safe for the lender. Also, there are usually no processing fees that would accompany this sort of loan as well since there really is no need to try to squeeze cash from the debtor.
But probably the biggest benefit of this type of loan is that does not require any credit history. Since the value of this precious metal is pretty solid, there is no need to show any good payment record. Lenders know they are safe since they can sell the piece any time they want if ever the loan is defaulted.
Those are some things to know about this type of loan. Now, these are usually gotten if ever one is quite desperate to get money. This could usually be for emergencies or unexpected expenses that incur and need to be paid right away.
These types of debt are actually most common in India because of the high demand for this metal. However, many other countries such as the US or the UAE offer this type of deal. The great thing about this type of loan is that it is quick to process since this precious metal already has a value in the commodity market, making it very easy also to liquidate.
The process of acquiring this loan is extremely simple. All one has to do is pledge to have a piece of golden jewelry, bullion, or accessory as the collateral to the loan which will be given to the lender in the event that the borrower cannot pay. One very important thing to take note is that the loan amount to be given to the borrower is only a percentage of the fair market value.
Of course, the item also has to be valued and appraised. Some of the things that have to be taken into consideration would be the karat of the piece as well as the weight. It is from this appraisal that the lender will determine the value of the piece and give a proposal to how much he or she can give the loan for.
These kinds of debts though, are usually very short term loans. They would usually have a period of around two months to about a year depending on the agreement of the two parties. Of course, there are some people who would drag on the loan to about a few years but the loan rarely gets dragged to up to five years or so.
Being backed by an international standard, the processing is fast since golden items can be turned into cash extremely fast. Due to that, loans like these also have really low interest rates since it is extremely safe for the lender. Also, there are usually no processing fees that would accompany this sort of loan as well since there really is no need to try to squeeze cash from the debtor.
But probably the biggest benefit of this type of loan is that does not require any credit history. Since the value of this precious metal is pretty solid, there is no need to show any good payment record. Lenders know they are safe since they can sell the piece any time they want if ever the loan is defaulted.
Those are some things to know about this type of loan. Now, these are usually gotten if ever one is quite desperate to get money. This could usually be for emergencies or unexpected expenses that incur and need to be paid right away.
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