Using collateral to secure a personal loan makes it cheaper and easier to borrow money.

Here’s what you need to know about leveraging a high-value asset to unlock short-term access to capital.

What is collateral?

Collateral refers to an asset, with monetary value, that’s accepted by a bank or finance company as security for a loan.

What counts as collateral?

Depending on the type of secured loan, collateral can be just about anything of worth. A key factor is how easily it can be converted into cash.

Shares, unit trusts, life insurance policies and cash in money-market funds and savings accounts are used to mitigate the risk carried by lenders specialising in business loans.

Vehicles and properties back car and mortgage loans respectively.

Fine artworks, precious metals, jewellery, and even designer handbags are viewed favourably by lenders in the asset-based lending space.

Provided an item has a re-sale value, it qualifies as collateral, especially in the less formal financial systems.

Assets commonly used as collateral for personal loans in SA

Lamna South Africa accepts the following assets as security for personal loans:

  • designer handbags
  • non-fungible tokens (NFTs)
  • jewellery
  • gold and diamonds
  • fine artworks
  • antiques
  • luxury watches
  • yachts and boats
  • cars and trucks
  • motorbikes.

Why consider a collateral-based personal loan?

Collateral-based personal loans are typically cheaper. They also offer more flexible repayment terms.

Qualifying for this type of secured loan is quick and easy. There’s no reliance on credit history, financial status and income as qualifying criteria.

In fact, asset-based lenders, like Lamna, don’t share information with, or report loan defaulters to, credit agencies.

The loan agreement is confidential. It has no impact on a client’s credit score, financial track record or ability to raise funds again in the future.

Anyone with a fully-paid asset is basically pre-approved for a personal loan secured by collateral.

Using collateral to secure a small business loan

It’s difficult, especially for start-ups, to secure business loans from banks. Formal lenders typically require several years of financial records as part of the loan approval process.

Instead, small business owners can bridge cash-flow gaps or raise the funds to exploit opportunities by leveraging the value of personal assets, as collateral for loans.

For example, use a company vehicle to secure the funds to pay staff and suppliers on time, or to go ahead with a lucrative opportunity for expanding the business.

Personal assets like luxury watches, jewellery and artworks of value can also be used to secure short-term loans.

What to make sure you know before getting a loan

Before signing on the dotted line, double-check the terms of the agreement.

You should be aware of the APR, or total cost of the loan, including interest and fees.

Similarly, the monthly repayments, and how long you have to repay the loan, should be outlined in black and white.

What happens to the collateral when you can’t pay back the loan within the agreed term must be dealt with during the loan origination process, and included in the loan agreement.

Short-term asset-based loans from Lamna

Lamna accepts a wide range of high-value items as collateral for a personal loan in South Africa.

We’re a registered credit provider, accredited with the Financial Services Board and the National Credit Regulator. Our interest rates comply with those set out in the National Credit Act. We don’t impose hidden fees or early settlement penalties.

We have branches in cities across South Africa and in Botswana.

For more information, call or WhatsApp us on 086 111 2866 or simply complete and submit our online application form.

Illustrative example

Client borrows R10,000 for 90 days.

Loan Amount Repay Terms Monthly Repayment Total Repayment Initiation Fee Monthly Fee
(Interest + Service charge)
R10 000 3 months R568.40 R12 902.20 R1 197 R560 60%

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APR & Loan repayment period

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.


All accounts may be renewed if they are up to date.


All payments are made via EFT or direct deposits into Lamna’s bank account. There are no debit orders.


Non-payments may result in the matters being escalated.

Illustrative example

Client borrows R10,000 for 90 days.

Loan Amount Repayment Period Monthly Repayment Total Cost of Loan Initiation Fee Monthly Fee
(Interest + Service charge)
R10 000 3 months R568.40 R12 902.20 R1 197 R560 60%