Collateral is an asset a borrower pledges as security for a loan. If the borrower defaults on the loan, the lender can seize that asset. Collateral loans can be risky, but they don’t involve many qualifications. The lender will have fewer requirements knowing you put your asset on the line.

The loan process is typically used in a pawn shop setting. Pawn shops provide loans to customers who put their items up for collateral. This article will explain how the process works and what assets you can use for a collateral loan.

How Does a Collateral Loan Work?

The collateral loan process is easy. Here’s how it works:

1.    Come into the shop with an item of value.

2.    The salesperson will assess your item and make you a loan offer. The loan is typically equal to a percentage of the item’s value.

3.    If you accept the loan, you can walk away with cash in hand. You must continue making payments on the loan to retrieve your item.

4.    If you default on the loan, the pawn shop will keep your item, but the unpaid amount will never go into collections or impact your credit.

What Items Can I Use as Collateral for a Loan?

The items you can use as collateral depends on what the store carries. For example, some pawn shops specialize in luxury items such as designer purses and watches. Others may sell electronics or firearms. They may also be choosy about the brands they accept.

Generally accepted items include:

·  Valuable antiques

·  Jewelry, precious metals, and gems

·  Firearms

·  Electronics

·  Luxury watches

·  Musical instruments

·  Collectibles

·  Power tools

However, not every pawn shop will accept each of these items. Research pawn shops to find out the items they carry. This will help you determine if they will accept the item you want to loan.

Quality Counts

The pawn shop will also consider quality when they assess your item. If your item is damaged or non-functional, they may not accept it. Some shops will accept damaged items but offer a reduced loan amount.

Ensure your item is in the best shape possible for optimal loan amounts. Clean it before taking it in. Make small repairs to make it more functional if possible.

There are other things you can do to ensure the highest possible pawn shop loan. For example, a certificate of authenticity or original receipt may make your item more desirable. You should also research to find out your item’s value. This will give you some leverage when negotiating.

Cash Express Offers High Loan Amounts

Cash Express provides cash loans for valuable items, including gold, computers, antiques, watches, jewelry, coins, and other high-end items. We offer high values and low interest rates. Our staff is friendly and easy to work with. We will ensure you are happy with your loan amount.

Contact us when you are ready to buy or sell. We offer great deals and quality items.