Investing in a luxury watch is one of life’s major milestones. In many cases, these prestigious timepieces are purchased to signify an important accomplishment: perhaps a marriage, career advancement, or becoming a parent. Other times, we receive high-end watches as a gift to commemorate a graduation, retirement, or other achievement. No matter how you came by your luxury watches, chances are that these accessories hold more than just monetary value.
When a timepiece has sentimental as well as financial value, you likely want to avoid selling it. At the same time, situations in life often arise that necessitate access to fast capital. Maybe you are facing unexpected medical bills, looking to get in on the ground floor of a hot new investment, switching up your stock portfolio, or scoring a great deal on real estate. You need an influx of cash, and fast. Selling your luxury watch might seem like the path of least resistance. But have you considered borrowing against it instead?
Today, we are taking a closer look at a lesser known pathway for cashing in on your luxury watches: asset loans. This unique type of lending allows you to get the liquidity you need when you need it, all without selling off your prized possessions. We will outline the basics of what asset lending means, how to find a reputable provider, what items you can borrow against, and much more.
Tim’s Story: The Benefits When You Borrow Against Your Watch
Borrowing against your luxury watch comes with many benefits, especially when compared to selling the timepiece. To better understand the perks, we will take a look at the story of a luxury watch owner named Tim.
A few years ago, Tim graduated from law school with a great job offer at a major Manhattan firm. To celebrate his accomplishments, Tim’s parents gifted him a Patek Philippe watch. Tim loves this timepiece and wears it often as he has worked his way up from junior to senior associate at his firm. Now, Tim has his eyes on earning partner.
But Tim’s life is not just centered around work. He is getting ready to propose to his girlfriend. He just needs the perfect ring. Tim’s girlfriend likes the finer things in life and will certainly be expecting a memorable diamond. Tim needs an influx of cash to purchase the ring before the couple leaves on their trip to Paris, where Tim is planning to propose.
Tim has two options: First, he could sell his Patek Philippe watch and receive a lump sum of cash to spend on the ring. This method will certainly allow Tim to purchase the ring of his girlfriend’s dreams. However, he will have to give up the watch that his parents bought him as a gift, which has come to represent a treasured memory of finishing law school and has been at his side through many major career milestones since. Tim would rather not abandon his watch.
Luckily, there is another choice. Instead of selling his watch, Tim can borrow against its value through an asset loan. This type of loan is typically dispensed as a percentage of the leveraged item’s value. For this example, imagine that Tim’s Patek Philippe watch is worth $100,000 on the secondary market. If Tim gets a loan of 80% of the watch’s value, he will have access to $80,000 to spend on a ring. That should be plenty to score a memorable diamond!
Even better, Tim will not need to sell his watch. After paying back the loan, he will reclaim the watch in the same condition he left it in. Borrowing against his watch allows Tim to truly have it all: a gorgeous engagement ring for his partner and the watch that represents his achievements.
Plus, Tim is holding onto a valuable asset. After the couple gets married, Tim may want to leverage his watch again in order to come up with the money for a down payment on a home they have both fallen in love with. Selling the watch removes the option for further liquidity in the future; borrowing it keeps all of Tim’s options open, giving him the flexibility he needs to succeed at every step along the way.
We can imagine Tim leveraging his watch in the future to help with paying for his son’s college education, a milestone anniversary trip for him and his wife, or even a real estate property investment as he looks to diversify his portfolio. Maybe when Tim’s son graduates from college, Tim will get the chance to give him his own luxury watch, passing on the incredible gift his parents once gave him and building generational wealth in the process.
How to Borrow Against Luxury Watches: The Basics
As you can see, there are plenty of benefits to enjoy when it comes to borrowing against your luxury watch. So, how exactly does this process work?
Generally speaking, borrowing against a luxury watch or a piece of fine diamond jewelry begins with an appraisal. The appraisal is essentially an inspection process conducted by experienced watch and jewelry experts. These individuals will look at the watch’s visual appearance and condition as well as its functionality and report any damage or issues.
An appraisal typically also involves looking at market prices and trends for reselling the watch. Horological experts, like our team at AMETA Finance Group, keep their fingers on the pulse of secondary market watch trends to understand how certain brands, models, and vintage pieces are selling and what someone could expect to bring in for that watch.
These sales evaluations matter for a luxury watch loan, because if you fail to pay back the loan after many extensions and pardons, the lender may repossess and sell your watch to recoup their losses. This arrangement is how asset lenders are able to offer benefits like lower interest rates, higher loan amounts, and no credit checks: They have a built-in system to protect themselves in the case of someone defaulting on a loan.
If that sounds daunting, there is no need to worry. In the majority of cases, the borrower pays back their loan on time and receives their asset back in tip-top shape.
After the appraisal is complete, the lender will offer you a loan as a percentage of your watch’s value. At AMETA, we offer loans of 60% to 80% of your item’s market value.
All you have to do after that is sign the loan agreement. Our AMETA loan agreements are digital, meaning that you can sign online, saving the time of traveling to our headquarters. The next step? See your loan deposited directly into your account in just 24-48 hours! Seriously, it is that easy.
Paying back your loan is also a breeze. When you sign the loan agreement, you will have a clear picture of how much you will be paying each month and over what span of time. You can budget accordingly and ensure you are not falling behind. If an issue comes up with your repayment plan, we are happy to help work out a solution that fits your needs!
The Perks of Asset Loans for Luxury Watches
Asset loans, also called collateral loans or unsecured loans come with a plethora of benefits for both the lender and the borrower. As we mentioned previously, the lender has a built-in system to protect themselves and minimize their losses. For that reason, asset loans are not as risky as their unsecured counterparts (think of the traditional personal loan you might acquire through a bank or standard financial institution).
This reduced risk translates into numerous perks for the borrower, such as:
- Low Interest Rates: While the average rate for a traditional personal loan is currently around 12%, rates for asset loans are significantly lower. At AMETA, we offer competitive interest rates of just 4%.
- High Loan Amounts: Generally, personal loans from a standard bank are capped around $50,000 to $100,000. Asset loans open up the possibility of accessing much more cash, with our cap at AMETA clocking in at $5 million.
- No Credit Checks: A standard personal loan depends on credit checks and proof of income statements to demonstrate that you can be trusted to pay back the loan. With an asset loan, you are pledging your commitment to repaying the loan by leveraging your high-end asset, such as your luxury watch or heirloom jewelry.
Borrowing against your watch offers an excellent solution for needing liquidity without the commitment of selling it and losing access to it forever. When you are ready to get started, reach out to our team at AMETA Finance Group.
Access Collateral Loans in No Time With AMETA Finance Group
Kick off the asset loan process with a free appraisal to determine the worth of your luxury timepiece. You might be surprised by how much money you could access with a high-end watch or diamond jewelry loan from AMETA Finance Group.
Our trusted team is your go-to destination when you are ready to borrow against your valuable watches and jewelry. We are here when you need us, whenever you are ready to make a change in your financial story.
Get started today by filling out this short form.
