When it comes to collateral of a loan, not all types of assets are created equal. You have probably heard of using real estate, vehicles, or even fine art as assets to secure a personal loan. But did you know that you can also use luxury watches as loan collateral?
Luxury watches are the ideal collateral of a loan due to their high value, quick appraisal process, specialized lending landscape, and strong investment potential. Today, we are going to take a closer look at the ways that high-end watches are revolutionizing the world of asset backed lending. Instead of letting your valuable assets sit idle, put them to work to boost your financial portfolio as a whole.
What Is the Collateral of a Loan?
When talking about loans, the collateral of a loan refers to an asset being leveraged to secure the loan. Let’s break it down with an example.
Imagine that you need $100,000 to get in on an exclusive investment opportunity that promises to deliver big time. Sure, you have assets totaling far more than six figures… but right now, you are not particularly liquid. Using one of your assets, such as a luxury watch, as collateral for a loan is a great way to get cash fast without jumping through hoops like credit checks or submitting tax returns and earnings statements to your bank.
Instead of going through a traditional lender, which can take a lot of time and paperwork, you decide to look into watch loans. With this type of asset based lending, you can use your watch as collateral. This means that the lender will allow you to borrow money typically equal to a percentage of the market value of your watch (or whatever asset you are using as collateral). The lender will hold onto your watch until you repay the loan in full.
This arrangement reduces the risk for the lender, but it also opens doors for you. How? If you default on the loan and fail to pay it back, after a (fairly lengthy) amount of time, the lender can seize your asset and resell it to recoup their losses in lending you money. That is not the normal scenario, however. Instead, most borrowers repay their loans in full and are given back their assets. While you had access to quick liquidity from a watch loan, however, you probably made investments and utilized your influx of cash to build even more wealth, cementing your success.
In this sense, using your luxury watch as collateral offers an unprecedented opportunity. Certain high-end watch brands are already appreciating assets, and the watch market is booming, with an estimated global value of over $75 billion. But do not let these invaluable assets go to waste, collecting dust on a shelf in your closet. Instead, you can leverage these possessions to improve your overall financial position. When you bet on yourself, you will always win.
The Benefits of Luxury Watch Loans
If you can walk into your bank and get a loan (or head to a pawn shop with your watch, for that matter), why would you go to the trouble of securing a specialized luxury watch loan? Many people default to these traditional, perhaps better-known types of lending… but if you are the proud owner of a luxury watch, you have a trick up your sleeve that you may not have even considered.
Traditional lending methods, like securing a personal loan directly from the bank, come with a number of administrative hurdles and drawbacks. First and foremost, the amount of money you can garner through a personal loan will typically depend on your credit score and financial history. If you have had any financial setbacks throughout your life, you probably feel like you are still paying for them… even if you have completely paid them off!
With asset based lending, you will experience a completely different world. You can access the benefits of luxury watch loans simply by getting your high-end timepiece appraised. If you work with our team at AMETA Finance Group, you can easily access 60% to 80% of your watch’s market value within just days of your appraisal. (By the way, this is much higher than what you could get at a pawn shop, where the average pawn loan is just $150. Pawn shops can normally offer only 25% to 50% of an item’s value.)
At AMETA, you will not need to undergo a credit check and the financial scrutiny that comes with it. Additionally, there are no penalties to your credit when you choose collateral based lending. You can get the liquidity you need, and fast. Luxury watches are the perfect item to make the most of your collateral loan.
Why Luxury Watches Make Great Collateral
There are many different types of assets you can use as the collateral of a loan, but in our humble opinion, luxury watches are the best. Why? There are pros and cons of collateral loans.
Reason #1: High Loan Amounts
Watch loans and other collateral loans are typically given as a percentage of the market value of whatever asset you are using as collateral. At AMETA Finance Group, we can provide loans up to 80% of the value of your timepiece. As luxury watches generally come with expensive price tags, this means you can access a lot of cash… and fast!
For example, the Richard Mille watch pictured above costs over $340,000. If you got a loan equal to 80% of this watch’s value, you could get your hands on more than $272,000 in as little as 24 hours. Some of the other best brands for luxury watch loans include Rolex, Audemars Piguet, Patek Philippe, and F.P. Journe.
Reason #2: Straightforward to Appraise
Unlike some other types of assets (such as fine art or antiques, for example), luxury watches are relatively straightforward to appraise. This is not to say that anyone can appraise a luxury watch, but more so to point out that when you work with a trusted, reputable lender, they will have a team of specialists who can complete a thorough appraisal in no time. When you are looking for liquidity to get in on life’s next big opportunity, time is of the essence! In fact, that leads us right into our next point.
Reason #3: Specialized Lender Availability
Luxury watches are an excellent asset to use as collateral of a loan due to the availability of specialized lenders. Our team at AMETA Finance Group, for example, has the knowledge and expertise to give you the best possible appraisal for your watch. We have been a staple of New York City’s renowned Diamond District for years, and we are in tune with all of the happenings in the horological world. We’ll consider factors like the brand name, condition, market value, recent sale amounts, and more when we appraise your watch, ensuring we take into account all of its winning qualities. Plus, we have a safe and secure vault where we store the watches on loan with us during your repayment period, ensuring the ultimate peace of mind. You don’t want to work with just anyone when you are taking out a watch loan. Choose a trusted partner that will help you get the best deal on the market and see for yourself how easy it is to get a loan against your watch.
Reason #4: Access to Quick Liquidity
With luxury watch loans, you can get your hands on the money you need when you need it. At AMETA, your loan amount will be wired right to your bank account, often within 24 hours of the loan agreement being signed. Once you receive the deposit, you can start using the money immediately. We understand that your time is valuable, and that is why we work efficiently throughout the appraisal process so that you don’t have to wait around to secure your next big investment, schedule that vacation, or cover unexpected expenses.
Although you will get your money fast, there is no rush to pay it back. With generous 15-month repayment terms, you will not be scrambling to come up with the cash.
Reason #5: Strong Investment Potential
Many luxury watches increase in value over time, due to discontinuation, popularity with celebrities, scarcity, or countless other factors. When you buy a luxury watch, you might hope that it appreciates – and the best way to take advantage of this boost in value is to take out a loan. In fact, if your watch appreciates by more than 20%, you could likely get a loan worth more than you even paid for it in the first place!
Build Your Watch Collection, Build Your Loan Potential
At AMETA Finance Group, we are your trusted partner for all things luxury watch loans. We will work with you every step of the way to ensure you get a reliable appraisal for your watch, peace of mind when storing it with us, and a seamless return of the asset when your loan is paid off. Want to see if your watch is a candidate for an AMETA loan? Check us out here.
