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May 24, 2016, 01:06:22 PM |
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This thread is for those of you who are looking to use Physical collateral to get a loan. There are few people on here who will take physical collateral to fund a loan for you, and the explanation below is why.
1.
You are not going to get a loan for the value of what you can sell your physical collateral for on the streets or on a sales site. Why you ask??
Remember, the loan maker here is loaning money on the item, not buying it. The loan maker must consider the cost of storage, security and future demand for the item, along with the resale value if the loan is not repaid, along with the costs of reselling the collateral and whether or not the collateral is returned to the loan broker because the customer is not happy with its condition. The average loan amount on physical nationally is $150; however, loans can be made for any amount, depending on the value of the pawned item.
2.
I can sell my item for $100, can I use that as collateral for a $100 loan? NO you can not. because the loan maker must consider the cost of storage, security and future demand for the item, along with the resale value if the loan is not repaid, along with the costs of reselling the collateral and whether or not the collateral is returned to the loan broker because the customer is not happy with its condition; your item is only worth 1/2 of the used low to average sales price for that item. Even though you think you can sell it for $100, the average sales price for this item may only be $80. If the average sales price is only $80, you are going to be able to use that item for a loan of $40 to $50 dollars. This is the way it is because use Loan Makers do not want your item. We want our BTC or Cash back at the end of the transaction, so this gives you more motivation to get your collateral back by paying your loan amount with interest.
3.
Using physical collateral for an online loan involves more. Because this is an online loan, your collateral needs to be in the hands of the loan maker or someone they approve to hold you physical collateral for them. This means there are shipping charges involved. When there are shipping charges involves, the person putting the collateral up is responsible for those charges. You will need to pay the shipping to and from the place the collateral is being held. Because your item is of value, you will need to make sure you insure and track your package, so there are no issues in the shipping process. These are costs you are not going to get back.
EXAMPLE:
Collateral Used: iPhone 6s Plus (32GB)
New Cost: $700
Average used Sales Price: $370
Value as Collateral for Loan: $150 - $190
This sums up physical collateral for a loan in a few easy steps. Now, please do not get upset or insult us loan makers who are willing to take physical collateral for a loan, for there are only a few of us that will do this. These reason are why your brand new phone that cost you over $700 is only worth about $170 for collateral as a loan. Anyone who wants to ad something, please do. I am just trying to help those who want to use Physical collateral as a loan understand.
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