Many Utahns rely on unsecured loans to alleviate an urgent financial need. But sometimes, they don’t cut it. Any of these loans can help you get instant cash, but they have stricter borrowing limits because they present a lot of risk to lenders.
When you need a larger amount of money, you need to provide security for a loan, which is any asset of value that a lender can resell to recoup any loss. Below are the possessions you can use as collateral.
1. Your Precious Jewelry
If you have valuable jewelry to pawn in South Salt Lake, Utah, strongly consider offering it to an interested lender. But you can’t just walk into a pawnshop and demand money for it. You need a strategy to get a fair loan for what it’s worth.
Since you’re not an expert, bring it to a qualified appraiser to have an idea about how much it currently costs. Don’t make any presumption based on the amount you paid to buy it, for its price may be more or less now.
If your jewelry has gems, obtain a gemological report to have a detailed assessment of its precious stones with you when you speak to a pawnbroker. If your piece is made of gold or another precious metal, know its current market price to have a clue about how much your lender can gain from retaining it.
The more you know about your jewelry, the more you can bargain with a lender effectively. Keep your cards close to your chest, though, to negotiate for a more favorable deal.
2. Your Future Paycheck
Do you need extra cash until your next paycheck comes? Use a payday loan, so you can get by until you receive your next salary.
The security for a payday loan is a postdated check for the cash that you wish to get and the fee of borrowing it. The lender takes the check and gives you the amount you need to loan less the fee. If you return what you owe plus the fee the lender charges, your check goes back to you. But if you don’t pay up, the lender cashes the check.
It’s imperative to settle a payday loan because it can create a domino effect that can ruin your credit big time. Having insufficient funds when the lender encashes your check can prompt overdraft fees and put you on the radar of a collections agency.
To avoid damaging your credit, ask your lender to roll over your loan to refresh its term in exchange of paying another fee to keep what you originally owe until the next due date.
3. Your Vehicle’s Title
If your car title is clean, you may be allowed to use it as collateral to borrow against the value of your vehicle. The vehicle is technically the security for the loan, but you don’t have to turn over the keys, so you can continue driving it.
You may find lenders that accept other motor vehicles as collateral other than a car, like a truck, an all-terrain vehicle, a motorcycle, or a snowmobile. If you default on your title loan, repossession ensues.
Loans, secured or unsecured, are obligations you can’t ignore, or else there are consequences. Understand how your chosen loan works to keep your end of the bargain and avoid losing something you value, be it a tangible asset or good credit standing.