Loans Against Bullion and Krugerrands
Can I borrow against gold or silver bars?
The short answer
Gold and silver bars can be used as security for a loan where the credit provider accepts them. The lender checks the refiner, weight, fineness, condition and any assay documentation, values the bar against the current metal price on a stated basis and lends part of that value. Credit and affordability checks required by law apply, and interest, fees and charges are disclosed in a quotation before you sign. Knox considers loans against items made of gold, silver and diamonds, and against luxury high-end watches and handbags. Examples include gold and silver coins or bars, gold and silver jewellery, cutlery and trophies, watches from brands such as Rolex, Cartier and Patek Philippe, and bags from brands such as Chanel, Louis Vuitton and Hermès.
How bar-backed lending works
A bullion bar is a cast or minted bar of refined gold or silver, usually stamped with its refiner, weight and fineness. When a bar is used as security, the credit provider holds it for the loan term and releases it once the loan and all charges are settled, under a written credit agreement.
How bars are generally checked and valued
- Refiner and markings: bars from recognised refiners are easier to verify and resell.
- Weight and fineness: these determine the metal content.
- Condition and packaging: damage, or opened tamper-evident packaging, may lead to further testing.
- Documentation: an assay certificate or purchase invoice helps establish what the bar is and that you own it.
The value is then linked to the current metal price using the basis set out by the lender. Silver is valued on its silver content, and silver prices can move more sharply than gold, which may affect how a lender treats it.
What depends on Knox policy
Knox decides which bars, refiners and metals it accepts, the valuation basis and the proportion of value it lends. The loan-to-value Knox applies depends on the item: up to 75% of the assessed value for gold, 60% for silver and 50% for watches and handbags. How price movements during the loan are handled is set out in the agreement. Knox's pawn agreement has no margin-call clause: the amount you owe does not change with the gold price, and Knox does not ask for additional security or early repayment if the price falls. Ask whether the same bar is returned to you or an equivalent one. Yes. Pledged items are stored separately from other goods and the same item is returned to you, in the condition in which it was held, once the settlement amount is paid. You must present your barcode receipt, proof of identity and your signature.
Your rights and what to do next
Before you sign, you should receive a pre-agreement statement and quotation. The credit agreement sets out early settlement, statements, extension, default, how bars may be sold after a default and how to complain. Personal information collected for the assessment must be handled in line with the Protection of Personal Information Act. Bring the bars and their documentation when you request an assessment. Bring your ID, proof of address (dated within the last 3 months), the bank details for the account the loan should be paid into and for the debit order, and any certificates, invoices or papers for the item. If you are married in community of property, your spouse must consent to the loan.
How Knox handles this
Ready for the next step?
Speak to the Knox team about your situation. They will confirm current pricing, availability and requirements before you decide.
