When you need to secure a loan with some type of collateral, it’s understandable to be hesitant to put up your own home. You may also be in a situation where this isn’t possible or practical, or you may simply be looking to explore other possibilities. This may get you to the point where you’re wondering if you can use gold as collateral to obtain a loan from a bank or a similar lender. The experts at First National Bullion and Coin, Scottsdale gold collectors’ premier choice for the most complete information on every aspect of owning precious metals, explain how you may be able to use your gold as collateral when you want to get a loan from a bank.

The Short Answer Is Yes (in Most Cases)

Gold has a long history of being a stable and reliable commodity. In fact, gold typically retains its value regardless of what’s going on with the economy, which is certainly something a lender appreciates just as much as you do. This is why it’s not unusual for banks and other lenders to be willing to accept gold as collateral for a loan. Typically, it’s a process that involves:

• Contacting a lender that accepts gold as collateral
• Discussing your loan-related needs
• Submitting your gold or other accepted precious metals for evaluation
• Receiving a quote for the amount of a loan you qualify for

Factors Determining Your Ability to Use Gold as Collateral

The first one is the quality of your gold. Typically, it’s easier to use gold bars or coins as collateral. The problem with gold jewelry, even if we’re talking about really nice pieces, is that other metals are often included in the mix. This is typically done to increase resistance to damage from handling and wearing. On a positive note, if gold jewelry has a high appraised value, it can be considered acceptable.

Reasons to Use Gold as Collateral

In addition to what was mentioned earlier, gold can be used to quickly secure short-term loans you know you’ll be able to pay back. You’ll get the money you need for things like home improvements, medical bills, or even a well-deserved family vacation. Before you consider using gold for collateral, take a moment to determine what you’ll do with the money you receive and whether or not you’ll be able to repay the loan within a reasonable time frame.

Preparing to Use Gold as Collateral

Start by getting your gold appraised. This is worth doing so you’ll know for sure what kind of value your gold has, especially if it’s gold jewelry. You’ll also have some negotiating leverage as you work through the loan details. On a related note, take time to look through the loan details when you get ready to officially complete the loan process. Pay particular attention to the following details:

• The loan terms from your bank
• Whether or not there are additional fees associated with your loan—and if so, what they are
• The repayment time frame and whether or not it’s reasonable
• The appraisal or evaluation the loan provider made and whether or not it closely matches the results of your own appraisal or documentation 

When they’re looking for the best place to buy gold bars, Scottsdale precious metals collectors reach out to the trustworthy professionals at First National Bullion. We can answer all your questions and help you find all the information you need on how precious metals can be a valuable part of your asset portfolio. Give one of our experienced dealers a call today at (480) 546-5089.

The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.