Hello, I have a general question to all the forum users. I was wondering if there ever was or is a bank or financial institution (not a pawnshop) that lets you take a loan using your gold or silver as collateral. If their is one have you used its service or would you use one if where around?
Pawn shops do this but expect high interest.... But don't know about anyone else short of selling your gold, then buying it back afterwards... That may not be a bad thing either if todays gold markets are anything to go by lol
Just saw an article a month or two ago about this business model in India; apparently, it's quite big there, with many women who have a lot of gold jewelry using it to start businesses. Sorry that I don't have a link. I seem to remember the article stating that nobody seems to be doing this in the US.
The reason I ask is because I am a collector/investor and I noticed that in the USA their is a lack for these type of loans. I have some capital and wanted to start a business using this type of model I hold your gold for a percentage of its worth and charge like 3-5% interest. Does this sound like something the investors and collectors might do yay or nay and feedback please.
Its very common in India and Asia. The gold jewelry market is much different over there. The common occurence is you buy starting at the gold price, and then negotiate the upcharge premium for it being in the form you desire. When you sell they pay you the melt value. This equates into a ten percent spread for decent sized piece of gold jewelry, much better than the 5 cents on the dollar you would be lucky to get in the US. For loans, the shops do the same thing. They will loan you up to melt value, and charge you a reasonable interest rate, (maybe 10%), and a one time pawn fee of around $30. You pick it up in three months or forfeit the item, unless you come in to pay the interest, in which case it can go longer. So, its just a whole different way to view gold over there as here. Its seen as universal stores of value that everyone is very aware of its innate value. Therefor, no one is stupid enough to pay $500 for a pair of gold earrings that only has a melt value of $30, so people never get completely hosed buying jewelry like they do here. I have a friend in Northern Thailand who used to admire the US, but to this day is just dumbfounded how stupidly we buy gold here. A year ago or so she told me she buys about 20 pieces a day, sells about 50 pieces a day, and has about 100 items in on pawn at her main store. I hope that helps in analyzing the revelance of pawning there.
The problem sir would be everyone here, (short of some ethnic groups), have overpaid by a factor of 10 the value of jewelry. Many get quite upset when you have to offer them considerably less than what they paid. This, coupled with the prevalence of low quality gold would make such a business troublesome in my view.
If you go to the ANA website their one they have listed. Coin World also has there add details I think means they hold your gold to make sure the loan is paid. Also there is a time limit on loan if I recall.
Yes, you are right. I read the ad every month, "Sell in haste, repent in leisure". He is someone who specializes in loans holding coins as collateral, but i have never heard of any experiences with him.
Charles and I used them back in the 1990. Monster boxes to get started witness American eagles . But coin shops have a different program it was 90-180 days
The best way to find out would be to ask your bank. I'm guessing most would not, but perhaps some would if they had someone knowledgeable in the gold/silver arena would could verify your items authenticity.
