In the current economic climate, we're all feeling the pinch. Unfortunately, this situation means banks aren't prepared to lend as readily, which has led me to investigate different items that can be used to obtain short-term personal asset loans.
Companies offering this service provide a viable alternative to a traditional pawnbroker, allowing people to access finance that is secured against valuable possessions. There is a lot less hassle involved in this process than with regular loans and because the money is secured against the items, rather than your credit history, these firms offer far better interest rates and terms than payday lenders. One option is to consider is a
UK pension transfer to a QROPS, but this is not such a wise idea, as a pension should be thought of as a long term investment, to provide you with an income in retirement, so other means must be considered.
Antiques and fine art
When I was exploring this possibility, I found it difficult to find out if anything I own would qualify to be used in this manner. Some of the accepted items are more obvious than others, but there may well be some possessions gathering dust at home that you're completely unaware could release much-needed funds, without the need to part with them for good.
If you've got a Monet or a Van Gogh sitting on your wall, the likelihood is you'll know it's worth a considerable sum. But what about that watercolour hidden away in the attic? If you're looking to use it as loan security, the lender will usually bring in an expert to provide an independent view of the item's worth. They'll be looking at the condition of the piece and the signature, before assessing the artists' current popularity and the rarity of the piece. Considering these factors together will allow them to produce an accurate valuation.
The same basic principles exist if it's an antique you're looking to have appraised and its worth remembering that the value of certain items can go down depending on their popularity at the time. Taking this into consideration, loans are a better option if you need to realise the cash quickly, but want to retain the valuable in the future to sell when its value has increased again.
Unlikely valuables
It's lovely to be able to possess a luxury watch, but there is no point wearing one to meetings with a bank manager who refuses to lend when you really need a loan. If the timepiece is in good condition - without scratches or dents - and you have the original box and papers, why not consider using it as security for a short-term loan? Unlike with most other valuables, newer watches are likely to be more valuable than older items.
Another unlikely item that can be used to secure a personal asset loan is fine wine. Again, the condition is of utmost importance, with the labels arguably as key to the value as ensuring the bottles are not damaged. If they are in their original casing, this will further increase the value.
Wine experts will also test the Ullage level of the bottles. This is the gap between the top of the casing or cork and the level of the wine. Although it is something I'd never heard of, it can have a large impact on value.
Finally, have you thought about using your car to secure a loan? If it is a prestige model or a classic vehicle with a trade value of more than £15,000, it is likely you will be able to use it for this purpose.
Once again, its worth when it comes to finance is largely dependent on the condition, as dents, scratches and any damage to the interiors will all detract from the total. You will need to be able to provide V5 documentation as proof of ownership, while the auction records of classic cars will also be considered.
