When you have a big purchase looming on the horizon, it can be tempting to swipe your credit card and forget about it. You will eventually pay it off, right? Is that not what credit cards are for?
Especially if you have a high credit limit, using your go-to card to make large purchases might seem like the easiest option. But ultimately, you will likely end up paying so much more money over all. Why? Credit card interest rates are not your friend. But that is not the only reason to choose a luxury collateral loan for your major investments.
Today, we are going to take an objective look at the ins and outs of watch and jewelry loans, exploring some key reasons that this type of borrowing stands out as a premier option. On the flip side, we will also examine credit card usage, comparing it to collateral lending to help you make an empowered, confident decision about which option is right for your wallet.
How Do Watch and Jewelry Loans Work?
Luxury watch loans and jewelry loans are two sides of the same coin when it comes to collateral lending. Both of these loan types involve the borrower (that is you) leveraging an upscale asset in exchange for a high-value loan.
Collateral loans come with a variety of perks when compared with traditional lending options. You will see benefits like:
- Low interest rates
- High loan amounts (at AMETA Finance Group, we can offer loans up to $5 million)
- Friendly repayment terms
- No credit checks or proof of income required
- Fast turnaround times and quick funding
- And so much more!
At AMETA Finance Group, for instance, we lend against a variety of elite watch brands such as Rolex, Audemars Piguet, Richard Mille, Patek Philippe, F.P. Journe, and Lange & Söhne. We also lend against high-end jewelry made with precious metals and/or gemstones, including diamonds, sapphires, rubies, emeralds, and others.
Borrowing against your high-end watches and jewelry allows you a level of financial flexibility that you will not find anywhere else. There are no restrictions on how or when you spend the money you secure through your collateral loan. All you need to do is pay this low-interest loan back on time, and you will recoup your valuable asset. Because the lender (that is us) has more security by holding onto your collateral through the duration of the loan period, you will be able to reap the benefits of low interest rates, high loan amounts, and more.
For many high net worth individuals, another key benefit here is not having to submit to credit checks or provide proof of income statements. When you have a complex earnings situation, demonstrating the full scope of your income can be challenging, if not impossible – especially for business owners and anyone who is an expert at building favorable tax structures for themselves. Additionally, anyone with less-than-perfect credit may struggle to receive a reasonable interest rate on a classic personal loan from a bank. If you do not want to struggle through these administrative hurdles, a loan against a luxury watch or jewelry loan may be your best path.
Now that you understand a bit more about collateral lending, it is time to take a closer look at watch and jewelry loans and how they compare to using a credit card.
4 Reasons to Use a Watch and Jewelry Loan Instead of Credit
Pulling out a piece of plastic from your wallet when you need to handle a big purchase might seem like the path of least resistance. But down the road, you are sure to pay the price – especially if you do not have a clear plan to pay down your credit card bill. In fact, about 46% of credit card users in America carry a balance month to month. But the even more shocking statistic is that 23% of credit card users do not believe they will ever be able to pay it off.
Instead of resigning yourself to a life of budgeting to pay off your credit card debt, consider your other lending options when you need an influx of cash or extra liquidity. If you own high-end watches or upscale jewelry, borrowing against these valuable assets can open doors that you did not even know existed. Here are just a few of the many reasons that the world’s biggest earners choose collateral lending over credit card usage every single time.
#1: Spending Flexibility
There are limits on what you can use a credit card to purchase. For example, you cannot use credit for a down payment towards a car or real estate. You will also need some cold, hard cash to get funded for business loans. When you take out a loan against your luxury watch or high-end jewelry, on the other hand, there are no restrictions on how you can use that money. You will have the cash you need to invest in real estate, purchase a new vehicle, or get your amazing startup idea off the ground.
#2: Interest Rates
Perhaps the biggest reason to choose a jewelry or watch loan versus using a credit card for large purchases is interest rates. The average credit card interest rate is now a shocking 24.36%, according to Lending Tree. On the flip side, when you take out a watch or jewelry loan with AMETA Finance Group, we offer interest rates around 4%. That is over 20 percentage points lower than what you would see with the standard credit card!
Sometimes, simply throwing numbers out there feels a little bit oblique. What do these figures actually mean in practice? Well, imagine that you need $10,000 for an important purchase and plan to pay it back over one year, in $1,000 installments. If you spent that amount on a credit card with a 24% interest rate, you would have to pay over $1,280 in interest alone!
Now, imagine that you took out that same amount as an amortized collateral loan with an interest rate of 4%. You pay off your loan within a year, and you will have to pay just $217 in interest. With a credit card, you pay nearly 6X more in interest. Of course, as you borrow more money, the face value of that difference increases more and more. This reason alone should send you running to research collateral lenders instead of credit card providers!
#3: Credit Score Impact
Your credit score is impacted by many different factors, but one of them is how much of your available credit you are using. Additionally, how many different lines of credit you have open, and how much total credit you have available contribute to your overall credit score. As such, using up more of the credit you already have, as you do when you spend money on your credit card, is not good for your credit score. Accessing a new line of credit (your watch or jewelry loan) and repaying it in a timely fashion with low interest rates can actually be a boon for your credit score – that is, if it impacts it at all.
#4: Access to More Cash
If you need a lot of cash to accomplish your current goals, using a credit card may not be your best option. Credit limits depend on factors like your credit score, income levels, and more – but the average American has a credit limit of just $30,000. Of course, people with higher income can often access much more credit. Business credit cards also often come with higher limits, with some going up to $100,000 – but that is normally the top barrier.
At AMETA Finance Group, on the other hand, we can offer watch and jewelry loans of up to $5 million. The loan amount you can get does not depend on your income or credit score. Instead, we appraise the luxury watch(es) and jewelry you want to leverage and offer you up to 80% of the market value of those items as a loan. When it comes to major life purchases, $100,000 might not cut it. But with up to $5 million to work with, the possibilities are virtually endless.
Open Financial Doors With Watch and Jewelry Loans at AMETA
When you work with our team at AMETA Finance Group to secure high-end jewelry and watch loans, you will experience unmatched service, value, and security. Our partnership with elite Manhattan luxury watch and jewelry seller Avi & Co. seals the deal, allowing us to channel decades of expertise in this unique vertical.
Whether you are looking to get a diamond ring loan or borrow against a vintage Rolex, AMETA is the place to turn for reliable and reputable collateral loans. Are you ready to start the business you have been dreaming about for years? Submit this short form to get a preliminary estimate of your watch or jewelry’s value, and see what doors may open for you.
