If you need a loan quickly or have poor credit and don't qualify for traditional loans, you may be thinking about taking out a collateral loan using your jewelry. These loans are typically offered by pawn shops and some jewelry shops. You leave your jewelry with the lender, and in exchange, you receive money. If you fail to pay off the loan, they own the jewelry and can sell it to recoup their losses. However, before you take out one of these loans, you may be wondering if you should have the jewelry appraised. The answer to this question is yes. Here are the reasons why you should always have your jewelry appraised before taking out a jewelry collateral loan.
For Insurance Purposes
One of the most important reasons to have your jewelry appraised before taking out a jewelry collateral loan is for insurance purposes. Once the lender takes possession of your jewelry, they are responsible for keeping it safe. However, fires and theft can occur, which can cause your jewelry to go missing. When this happens, it is your word against the lenders as to what the value of the piece of jewelry is unless you have a recent appraisal. The appraisal will state what exactly your jewelry is, what gems it has in it, the condition of the piece, and the estimated value of the piece. Many jewelry stores offer insurance appraisals, so call around and obtain one before you take out a a collateral loan using the jewelry.
To Ensure You Are Asking for a Reasonable Loan Amount
The second reason you should obtain a jewelry appraisal before taking out a collateral loan is to ensure you are getting a reasonable loan amount. A lot of people have no idea how much their jewelry is really worth. You may have a piece that is sentimental to you, and as such, feel it is worth more than it really is. Or you may have a heirloom piece that is worth more than you know. Getting jewelry appraised allows you to figure out what the real value is and, based on that, how much of a loan you should be seeking. It is important to note that you should never expect to receive a loan in the full amount that your jewelry is worth. After all, a lender will want to make some money off of the transaction if you fail to repay the loan.
If you need money quickly, you can use your jewelry as collateral to take out a loan. However, it is wise to have the jewelry appraised first. It can help you ensure you are asking for and receiving a reasonable loan amount and be important if your piece of jewelry goes missing.
For more information, contact a professional in your area or visit a website like http://solsjewelryandloan.net/.Share