Can you take loans against your diamond jewellery?

Loans are a necessity at some point in life for everyone. Sometimes, it becomes essential when misfortune strikes at the most unexpected moments. In such emergency situations, jewelleries are particularly useful collaterals to quickly get a loan. But what type of jewellery can fetch the maximum amount? Is diamond jewellery eligible for this? Diamond jewelleries are assets for lifetime and even become family heirloom over the years. But getting a loan against them is tricky. Read on to know all about securing loans against diamond jewellery.

Who offers loans against diamond?

Unlike the usual loans, the jewellery loans are slightly different. Here you are keeping the jewellery as a collateral to the institute against which you get a loan at par with the market value of the item. Banks usually do not offer such loans for diamonds, though few banks have specific loan schemes for gold.

For diamonds and precious jewels, you get loan from gold loan organizations, pawn shops, or specific companies that offer loans against diamonds. 

Can you get a gold loan for a diamond jewellery?

Let us consider an example- you have emerald cut diamond engagement rings set on gold. You wish to get a gold loan for the ring along with the stone. However, gold loan does not include the price and weight of the stone. 

In such case you will get a loan only as per the rate for gold and the gross weight of the metal on the ring. However, the purity of gold matters too. Since precious jewels are set in 18K or 14K gold, the loan you get is much less compared to 22k gold. The weight, carat and quality of the precious jewel will be irrelevant with respect to gold loan.

Thus, you cannot get gold loans for diamond jewellery.

What is the interest rate for the loan?

The interest depends solely on the discretion of the organization. If you are getting it from a local pawn shop, needless to say, the interest you need to pay will be extremely high. Even premium pawn shops charge a much higher interest compared to banks and even gold loan organizations. Ideally opt for any government approved lender who have schemes specifically for loan against diamond jewellery.

Documents required to get diamond loan

The first and foremost thing you need for a diamond loan is authentic and original documents. You must have the original copy of the receipt as a proof of ownership. You also need the GIA certification of the stone. Lastly, you need government issued identity card, social security number and details of any insurance or maintenance and damages till date. In case you do not have the GIA certification, it is tricky to get loans against your diamond from any authorised organization.

There are many local pawn shops which may offer loans without the certification but the risk would be high. The interest charged would be excessive and there is always a chance of fraud. It is always advised against getting loan for your jewels from such places.

Whether you have an organic or lab grown diamond engagement rings, the loan processing and policies would be similar for both. The above-mentioned factors are essential criteria to secure a loan and should be observed by all.

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