As tempting as it might be in these cash-strapped times to sell valuable jewellery and diamonds to raise extra money, now is not the time.
The market is depressed and a collateral loan on fine jewellery and diamonds is a better option.
South Africans hit by job cuts
Between 2.5 and 3.6 million people are estimated to have lost their jobs between February and April this year due to the COVID-19 pandemic.
Others have endured salary cuts or foregone commission.
This has led cash-strapped South Africans to look for new income sources.
Selling off unwanted or valuable goods is one way to make extra money but this route is not as easy or as lucrative as it was.
The impact of COVID-19 on demand for jewellery and diamonds
In times of crisis, the price of gold usually soars.
This is not the case for fine jewellery and diamonds.
A rush of people trying to sell these assets results in a flooded jewellery and diamond market.
Supply outstrips demand and the value of individual pieces drops.
What is a collateral loan?
Physical assets like jewellery, diamonds and gold are popular investments because they’re often more stable during a crisis.
While exchange rates and stocks are volatile, these assets give an investment portfolio a stable asset to act as collateral for loans.
A collateral loan is based on an asset, not your income or credit score.
Lenders take temporary possession of an asset and return it once the loan, interest and any fees have been paid off.
This allows you to access the value of your jewellery during tough times without having to sell it in a depressed market.
How can you get a loan against jewellery or diamonds?
Asset-based lenders use a high-value physical asset that you own as collateral for a cash loan.
These assets include jewellery, diamonds, gold, art, luxury watches and vehicles.
It’s a low-risk loan option that doesn’t affect your credit rating or your ownership of the asset.
What are the requirements for getting a loan?
Collateral loans on fine jewellery and diamonds don’t have the requirements of a traditional bank loan.
You don’t need to be employed.
All you need is an appropriate asset that’s in your name and is fully paid off.
You will need to supply proof of ownership (such as an invoice), your ID and proof of residence.
For fine jewellery and diamonds, the piece will be valued.
Benefits of a loan from Lamna
Getting a collateral loan on fine jewellery and diamonds from Lamna is quick and discreet.
In most cases, once the loan is approved it’s paid into your bank account within 24 hours.
Others benefits of choosing Lamna include:
- we’re a registered NCR credit provider
- our interest rates are competitive and fall within NCR guidelines
- there are no hidden fees or early settlement penalties
- loans are discreet and we don’t share your information with third parties
- we’re a well-established lender with physical branches across South Africa
- we don’t require a credit check and our loans won’t affect your credit score.
Client borrows R10,000 for 90 days.
Total Cost of Loan
Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.