A collateral loan is an alternative type of short-term loan that is popular with investors because it uses an asset as collateral.

Lamna offers fast, competitive collateral loans in Cape Town and other key cities across South Africa.

What is collateral?

Collateral is a type of asset that is used by lenders to secure a loan.

If the loan cannot be repaid, the collateral is seized by the lender and sold to cover the loan amount.

The loan amount is therefore no more than the resale value of the asset.

Types of collateral

Collateral can be any asset of a reasonable value and resale potential that is fully paid off and in the borrower’s name.

Below we outline examples of assets that are the most commonly used to secure collateral loans in the Mother City.

Cars, motorcycles and trucks

Cars, motorcycles and trucks that are paid off (not still financed with the bank) can be used as collateral on a loan as long as they are in good condition and have a decent resale value.

Classic cars can also be used to secure loans.

Gold, diamonds and jewellery

Gold is a fairly obvious asset to use as collateral because its value tends to be stable.

Jewellery, especially items with valuable gemstones such as diamonds, also qualifies as collateral. The value of all these items will fluctuate with the markets.

Luxury watches

Luxury watches are very high value items, especially those that still have their original boxes and certificates of authenticity. Even antique luxury watches can be used as collateral.

Well-known, prestigious brands like Patek Phillipe, Cartier, Rolex and Audemars Piguet traditionally attract the highest prices (and the highest loan amounts).

Artwork and antiques

Fine art and antiques can also be used as collateral as long as they have been appraised to be sure of their worth. Well-known artists are sure to secure a decent loan and antiques that have been valued by an expert can also qualify as collateral depending on their age and condition.

Yachts and boats

Most yachts and boats in good condition are high value items that would definitely qualify as collateral. Like vehicles, the boat or yacht will need to be paid off and in the borrower’s name. Yachts or boats in poor condition are less likely to secure a loan.

NFTs

Lamna is one of the only lenders to offer loans against NFTs in South Africa. If you can prove the unique identity and ownership of your NFT, as well as understand the underlying value then it can potentially be used as collateral on an asset-based loan.

Other collateral

Other assets that might qualify as collateral on a loan include luxury handbags, property, business assets, investment portfolios and insurance policies. However, whether these items are accepted by the lender will depend on many factors.

Collateral loans in Cape Town

At Lamna, we specialise in offering collateral loans in Cape Town against personal assets of significant value.

We securely store your asset for the duration of the loan and then return it to you once the loan and the interest are repaid.

The loan doesn’t affect your ownership of the asset in any way unless you are unable to repay the loan, in which case the asset would be used to cover the loan amount.

Some advantages of collateral loans over unsecured loans

Collateral loans have several advantages when compared to unsecured bank loans:

• Loan amounts can be much larger
• Interest rates are sometimes lower
• No invasive credit checks
• The loan doesn’t impact your credit score
• No need to submit payslips or bank statements
• No need to sell your asset to access its value
• Loans are paid out within 24 hours

Next steps: getting a loan against an asset in Cape Town

With Lamna, getting collateral loans in Cape Town is quick, simple and discreet. You can start the application process online or call us on 086 111 2866. Our Cape Town branch is in the heart of the city, in the Soho On Strand Building on Strand Street.

Based on some basic information about your asset, we’ll be able to offer you a provisional loan amount. This amount will be confirmed when you bring the asset to our offices for final appraisal.

Once the final loan amount is confirmed, you just need to provide proof of ownership, proof of address and a copy of your ID to go ahead.

Lamna is a registered credit provider (registration number NCRCP7428) and is fully compliant with NCR regulations. We are also a licensed financial services provider (FSB registration number 46335).