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How To Use Personal Property As Collateral For A Loan


There are alternative sources to lend you money when you have personal assets to guarantee repayment of a loan.When personal property is used to guaranty repayment of a loan it is known as "collateral."

If the asset you are considering using as collateral is personal property such as jewelry or antiques, get an idea of the value before you speak with potential lenders. An easy place to start is an on-line auction site such as offsite link. Alternatively, a local shop may give you an idea of value. There may be a charge even if you only ask for a ballpark value instead of a written appraisal.

Following are alternative sources to lend money against personal assets:

  • Banks and other Commercial Lenders
    • If you have personal property with substantial value, such as important art work, jewelry or silver, it is possible that a commercial lender such as a bank will give you a loan using the asset as collateral. (For example, U.S. Trust offsite link has advertised that it provides loan against art work.) Do not be surprised if the lender insists on taking possession of the property until the loan is paid off.
    • If you own your residence:
      • It is sometimes possible to add personal property to the value of a resident when obtaining a loan against real estate. This permits an increase in the size of the loan, and the deductible interest.
      • There are a variety of ways to access money without selling your residence. For more information, click here
  • Not For Profit Lenders
    • The Provident Loan Society of New York is a non-profti lending organization that provides fast loans secured by gold jewelry, diamond jewelry, gold coins, watches and silverware. The organization was established in 1894 (that is not a typo). Loans are provided in all 50 states. To learn more, go to: offsite link
  • Auction Houses
    • Some auction companies have programs that will lend money against the collateral of personal assets such as art, antiques, furniture or jewelry. If you are selling the item through the auction house, such a loan gets you cash now rather than waiting for the sale. If you want to keep possession of the objects, auction houses have been known to loan money against them provided you agree that the objects will be sold through the auction house after your demise.
    • Be sure to read the contract carefully. Pay particular attention to the fees that are charged. 
    • For information about choosing an auction house and tips for dealing with an auction house, click here
  • Pawnbrokers (also known as Collateral Loan Brokers)
    • Pawnbrokers generally loan money for a short period of time, such as three to six months, based on personal property which guarantees repayment of the loan.
    • To learn more about pawnbrokers, click here.
  • Personal loans
    • There are generally no restrictions or rules concerning use of personal property for loans by friends, relatives or employers, except that the interest rate agreed upon may not exceed the state's laws against excess interest (known as "usury laws.")
    • IIf you are considering borrowing from a friend or family member, see Borrowing From Friends and Family.
    • For information about the usury law in your state, see offsite link


  • To learn what assets can be used as collateral for a loan, click here.
  • For additional information, see the documents in "To Learn More."

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