Loans Against Jewellery and Watches
Is the loan amount based on retail value, resale value or metal value?
The short answer
A loan against jewellery or a watch is generally based on what the item would realistically fetch if sold, not on its retail price. For most gold, silver and platinum jewellery, that is closely linked to the value of the precious metal. For watches, resale value depends on the model, condition, authenticity, box and papers, service history and market demand. The lender then lends only part of that value.
Three different values
- Retail value is what a new or similar item costs in a shop. It includes design, brand, labour, overheads and the retailer's margin.
- Resale value is what the item could realistically be sold for in the second-hand market, which is often well below retail.
- Metal value is the value of the gold, silver or platinum content, based on weight, purity and current market prices.
Insurance replacement values are different again, because they estimate the cost of replacing an item new.
Which value lenders generally use
A secured lender needs a value it can rely on if the item has to be sold after a default. For plain gold jewellery, that is usually close to the metal value. For jewellery with significant design or gemstones, the lender may allow something for resale demand, or may disregard features that are hard to value. For watches, the lender looks at the resale market for that specific model, considering brand, reference, authenticity, condition, service history, box and papers, demand, liquidity and evidence of ownership.
What depends on Knox policy
Knox decides which value it uses for each type of item and what proportion of that 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. Metal content is established by weighing and testing. Knox verifies items through visual inspection, precise weighing and analysis of metal composition, and uses a diamond tester to confirm whether a stone is a genuine diamond. Knox also sets out how gemstones are treated. Knox's diamond tester shows whether a stone is a genuine diamond. Anything Knox cannot value on the spot is referred to its trusted partners, and when you book, Knox asks about your items so that the right professionals are available at your appointment. Whether watches are currently accepted is confirmed separately. Knox accepts luxury high-end watches, from brands such as Rolex, Cartier and Patek Philippe, for loan assessment.
What to do next
Bring any invoices, certificates or valuations you have, but expect the lending value to be lower than an insurance or retail figure. Ask how the value was arrived at and how much of it the proposed loan represents. The final amount also depends on the credit and affordability checks required by law, and the interest, fees and charges are set out in a pre-agreement quotation before you sign. Knox Precious Metals (Pty) Ltd is a registered credit provider, NCR registration number NCRCP21466.
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.
