Did you know that you can get a loan against the gold bullion that you own?
Previously, you had to go to a pawn shop or gold dealer to get a loan secured by your bullion. However, there are now many companies (including banks) that offer loans based on the value of your precious metals, and we are one of them.
Money Metals offers competitive, low-interest loans secured by your gold if you:
· Own at least $35,000 worth of precious metals
· Agree to store your bullion in our Class 3 vaulting facility in Idaho
· Plan to use your loan proceeds for business or investment purposes
Gold-secured loans are more accessible than traditional loans, but are they a good deal?
What is the Interest Rate on a Gold Loan?
As with traditional loans, you will pay interest on your gold loan. Gold loan interest rates from Money Metals Capital Group are slightly above the current Prime Rate, which is the lowest rate that commercial entities generally charge.
Our current gold loan interest rate is in the 6 percent (annualized) range. Money Metals' rates are similar to those charged on bank-offered business lines of credit, and WAY LOWER than any other options for borrowing against gold and silver in the U.S.
There are several types of interest: simple and compound, as well as fixed and variable.
A fixed gold loan interest rate doesn’t change over the life of the loan. As soon as you sign your paperwork, the interest rate is locked in and will remain the same until you pay the loan off.
A variable interest rate means that the percent of interest that you pay may change over the loan's tenure. Some variable gold loan interest rates change multiple times a day, while others adjust monthly, quarterly, or annually.
Simple interest is calculated only on the principal loan balance.
Compound interest is calculated very differently than simple interest. Rather than only paying interest on the principle of your loan, compound interest factors in any unpaid interest on the loan as well.
Money Metals currently offers interest-only revolving lines of credit, which adjust automatically if there are changes in the Prime Rate. Contact us for our current rate and use an online calculator to compare our terms with the competition—we’re confident we have the best rates on the market.
Is a Gold Loan Better than a Personal Loan?
Long story short: it depends. A gold loan offers several benefits that a traditional bank loan does not. Whether a gold loan is better than a personal loan, however, depends entirely on your situation.
A secured gold loan can offer you a higher loan amount than an unsecured personal loan, regardless of your credit history. The final loan figure is based solely on the value of the gold you are offering as collateral.
We offer loans up to 75 percent of your precious metals' value.
Another benefit of the Money Metals loan program is that the gold loan interest rate will likely be lower than that of a personal loan.
Personal loans do offer some advantages over gold loans, though, the biggest of which is that no collateral is required. You can also apply for a personal loan at your local bank. If in-person transactions matter to you, that could play a factor in your decision.
Is a Gold Loan Safe?
If you're new to the idea of gold loans, one of your first questions should be whether gold loans are safe. As long as you work with a legitimate institution—like us—gold loans are a safe and secure way to borrow money.
We store your gold in a secure location—our Money Metals Depository—to ensure it is safe. Our secure site has 24-hour monitoring through CCTV or video, electronic security, and trained security personnel, among other measures.
Your gold will be stored separately from everyone else's. We even insure your collateral while it is in our possession, ensuring that you will get the gold's market value returned to you in case of theft or natural disaster.
Another concern you might have is what happens if the price of gold falls during your loan term. We require you to increase your collateral or pay the margin difference on top of your gold loan interest rate if gold prices crash beyond a certain threshold during the term of your loan.
At Money Metals Capital Group, our goal is to offer the safest gold loan options possible.
Does Your Credit Score Affect the Interest Rate on a Gold Loan?
Because your gold secures the loan as collateral, your credit score will have no bearing on your eligibility for a gold loan or your gold loan interest rate. This point is one of the reasons so many people are turning to gold loans as a better way to borrow.
Collateral as security is one of the reasons that we can offer lower interest rates on these types of loans.
A failure to make payments, however, could affect your credit score in a default situation.
With this in mind, as with any loan, make sure you make your payments on time every month. If you have extenuating circumstances and must miss a payment, call us and let us know the situation. We’ll do what we can to help.
How Does a Gold Loan Work?
Applying for a gold loan from Money Metals Capital Group is easy. The procedure is very similar to that of procuring a personal loan from your bank with a few extra steps.
Complete our inquiry form, and we’ll get back to you to answer any questions you may have.
Ship your gold to us for inspection and secure storage.
Execute your loan documentation, providing signatures, bank information, etc.
Receive your loan funds either via check or electronic transfer.
Gold loans are a reliable, fast, borrower-friendly consumer loan option. With low-interest rates, variable loan lengths, no credit rating needed, and minimal documentation, they are one of the most convenient ways of dealing with small financial emergencies. Fill out our contact form to get started.
About the Author:
Clint Siegner is a Director at Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.