How does a loan against jewellery work?

What a jewellery-backed loan is

With a jewellery-backed loan, you hand qualifying pieces to a registered credit provider, which holds them as security for the money advanced. In a typical pledge arrangement you remain the owner while the jewellery is held, and the credit agreement records the item, the amount lent, the cost of credit and what must happen before the item is returned.

How the process generally works

1. The jewellery is examined, weighed and tested for metal content, and any gemstones are considered separately.
2. The lender works out how much it is prepared to lend against the assessed value.
3. Identity is verified and the credit and affordability assessments required by the National Credit Act are completed.
4. You receive a pre-agreement statement and quotation setting out the interest, fees, charges, term and repayment terms.
5. If you accept, you sign the credit agreement, the loan is paid out and the jewellery is held for the loan period.
6. Once you have repaid in full, the jewellery is released to you or your authorised representative.

What depends on Knox policy and on your jewellery

The types of jewellery accepted, the proportion of value lent, the term and the fees are set by Knox's credit policy and the agreement. 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. The amount offered for a particular piece depends on its metal type, purity, weight, condition and resale demand. 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. Gemstones, designer names and sentimental value do not necessarily add to the loan amount.

Your rights during the loan

The agreement sets out how you can settle early, which statements you will receive, the steps that apply if a payment is missed, when pledged items may be sold after a default and how to lodge a complaint. Personal information collected for the assessment is used for that purpose and must be handled in line with the Protection of Personal Information Act. Knox Precious Metals (Pty) Ltd is a registered credit provider, NCR registration number NCRCP21466.

What to do next

Request a loan assessment and bring the jewellery with your identity documents and any proof of ownership. Read the quotation carefully, ask about anything unclear and compare it with your other options, including selling or not borrowing at all; which suits you depends on your circumstances. 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.