Gold prices continue to rise in recent times even though the economy has taken a downturn. Gold is a very valuable metal, and most people don’t realize the amount of gold they may personally own. When people are in need of some quick cash, gold is the easiest of all to pawn or sell. Chicago Loan Company can write a collateral backed loan against many different types of gold items, such as gold coins, jewelry, or even damaged or broken jewelry.
What is a gold loan?
A gold loan is a loan backed by a gold article as collateral. It can be a set of gold bangles, a gold chain, or a gold coin. Collateral lenders, commonly referred to as pawn brokers or pawn shops, offer gold loans based on a certain percentage of the value of gold content offered as collateral. This means that the gold is what is securing the loan. At Chicago Loan Company the rate of interest and fees are not dependent on a client’s credit score or their standing with their bank. Another difference between a gold loan at Chicago Loan Company and a loan you may receive from a bank or another lending institution is that there are no restrictions on what you can use the proceeds from the loan on. Unlike an auto loan or mortgage that needs to be used towards the financing of a vehicle or real estate, a gold or collateral loan can be used on whatever you need or want to spend the money on.
What is the process of making a gold loan?
Unlike other asset loans, gold loans can be completed within a very short period of time. There are only a few factors in determining the amount for the loan: the weight and karat (the purity) of the gold item (such as jewelry or coins), and the current price of gold trading on the global commodity exchange market. Once the pawn lender determines the purity content of the gold item and the weight (both of which only take a couple of minutes to do), the loan can be issued in a matter of minutes. The lender will hold onto your gold item, give you cash in hand, and you pay interest to the lender until you can pick up your item. At Chicago Loan Company all loans are for four months, but you can pick the loan up earlier if you want. You only pay for the time the loan is active, there are no additional penalties or fees for redeeming the loan before the due date.
What are the different types of gold?
When people talk about different types of gold, they are usually referring to the karat (purity of the gold) and the color of the gold (yellow, white, and pink or rose). The gold karat refers to the purity of the gold or the percent of gold in the item. It is uncommon to find jewelry made from 24 karat gold (100% pure gold) because gold is a relatively weak metal and would be damaged very easily. Usually jewelers and craftsmen will use a lower karat of gold so that the jewelry will be stronger and able to hold up better to everyday wear and tear. The most common gold karats are 10K (41.6%), 14K (58.3%), 18K (75.0%), and 22K (91.6%) karat. The higher the karat or percent pure, the more gold value there is. It is also quite common to have a stamp on the inside or the bottom of the jewelry with the purity shown as a karat or a percent.
To add strength to the jewelry a variety of different metals may be added to the gold during the refining process. Depending on the types of other metals and the amount that they add can also affect the color of the gold. The most common colors of gold are yellow, white, and pink or rose. The most common metals added to gold to give it strength are silver, nickel, copper, palladium, and zinc. Different jewelers and jewelry companies use different amounts of these other metals to get their own unique shades of yellow, white, and pink gold. To keep the gold a yellow color usually there are a wide verity of metals at smaller amounts. To get the gold more of a white color, silver, nickel, and palladium will usually be added to the gold. It is also uncommon to see white gold jewelry over 14k. That is because it takes a lot of other white metals to turn the yellow gold white. To get the gold to come out a pink color you will need to add significant amounts of copper to the gold. Most jewelry companies will not say what other metals or how much they use to get their different colors gold. That way their yellow, white, and pink gold is unique to their own company.
What types of gold items can be used for a gold loan?
At Chicago Loan Company the three most common gold items that we loan against are gold coins, jewelry, and even broken or bent jewelry. When making a loan against gold coins sometimes we can lend more on the coin if there is numismatic value to the coin in addition to the value of the gold. Numismatic value is additional fair market value associated with certain coins based on rarity and collectability of the coin. When loaning against gold jewelry not only does the weight and karat of the gold determine the value, but any mounted gemstones mounted in the jewelry and who created the item may also play a factor. Some jewelry companies such as Cartier, Tiffany and Co., Van Cleef & Arpels, etc. are very sought-after and being made by one of these companies can add value to the jewelry. And if the jewelry was damaged or is broken and can no longer be worn, it still has value. The great thing about a gold loan is that the gold in the broken jewelry is still valuable.
Why do people take out gold loans?
There could be many reasons why borrowers may take out a gold loan. The concept of a gold loan is simple and straightforward, and the actual process is easy and quick. The calculation is also simple and easy to understand even to a non-experienced borrower, and the paperwork is minimal. For credit-challenged and unbanked borrowers, the option of a gold loan is attractive and offers independence from the bank. Many people find it very convenient and a less invasive alternative to a credit card, simply because it is an easy and fast process. There is no need for a credit check or employment verification. The licensed collateral gold lenders are regulated and follow the laws on federal, state and city levels.
Where can one get a gold loan?
Formerly known as T. N. Donnelly & Co., Chicago Loan Company, is one of the oldest family-owned jewelers in the United States. Located in the heart of Chicago’s Jewelers Row, Chicago Loan Company is a premier luxury pawnshop. Come find out what your gold is worth and get an honest valuation in a private, confidential, and secure setting. Call us today at: (312) 236-2929 or contact us online!