Borrowing Against Valuable Assets?

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1X83Z

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Hard to phrase this one in the form of a question, but...

As most of you know, you can borrow against a home, and you can borrow against an automobile. I know someone who borrowed against a 1998 Pontiac Grand Prix coupe (with the 3.8, but not the blown one).

Can you borrow against a different valuable asset? I mean, that '98 Pontiac which funded that girl's snowboard is in no way worth more than $4,000. Let's say I have a suit worth $4,000. Could I borrow against that? Maybe they can take the pants until I pay in full.

This is a serious question.
 
That's exactly what a pawnshop is. You take your treasured 1959 Gibson Les Paul Custom in. He looks at it and offers you $300. You accept it, he gives you $300 and a ticket. He puts the guitar on the rack with a pricetag that says $3000. If somebody buys it, you're SOL and he pockets $2700. If you can come back and pay the $300 (sometimes plus interest) before it sells, then he gives you back your guitar.

Car title loans are becoming ever more popular because they can keep the important part of the car (the title) in a filing cabinet instead of needing a parking garage or a warehouse. Also, with the advent of KBB etc. it's easy to negotiate a reasonable value for the car (unlike needing to be an expert in musical instruments, jewelry, or any of the other million things people try to pawn).
 
Yeah but I don't want to risk giving up the suit. (hypothetically) Plus, pawn shops aren't going to give you anywhere near the value you deserve. So we're saying there's no chance of this (since suits don't have titles)?
 
It depends on the item and the lender. For example banks may take stocks or bonds (particularly Bluechip), art (well known collectable art, not your 3 year old nephew's scribbling) or Jewelry as collateral, but are unlikely to take a depreciating asset. Your suit would definately be seen as a heavily depreciating asset as it is effectively worthless to someone else.

Some banks will do personal loans with no collateral if you have a good credit history and a steady job. The interest rates can be a bit high for these though. Not credit card high, but enough to make you think twice :)

"Backstreet" lenders, like pawnshops, pay-day loan traders etc may require a small peice of collateral, especially if your credit rating is poor, but their interest rates are normally one step away from extortion.

Then of course there is the Loanshark type, but I guess you are attached to your kneecaps :D
 
Gashlycrumb
It depends on the item and the lender. For example banks may take stocks or bonds (particularly Bluechip), art (well known collectable art, not your 3 year old nephew's scribbling) or Jewelry as collateral, but are unlikely to take a depreciating asset.
Click to expand...

They take a car!

Question answered, I guess. Thanks Duke and Gashly for playing along with my scenario!
 

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