Selling Gold, Jewellery and Watches
Should I sell my gold or borrow against it instead?
The short answer
There is no single right answer; it depends on your circumstances. Selling turns gold into money permanently and ends your exposure to its price. Borrowing against it keeps ownership for now, but adds interest, fees and the risk of losing the item if you cannot repay. Compare the full cost and consequences of each, and consider independent financial advice before you decide.
What each option means
Selling transfers ownership to the buyer in exchange for payment. You receive the agreed price, and you no longer gain or lose from future price movements. Borrowing against gold, often called an asset-backed or secured loan, means pledging the item as security for credit. You remain the owner while the item is held as security, repay the loan with interest and fees, and receive the item back when the loan is settled.
Questions worth asking yourself
- Do you need the money permanently, or only for a short, defined period?
- Can you afford the repayments, including interest and fees, from a reliable source?
- How important is the item to you, for sentimental or long-term reasons?
- What would happen if the gold price fell during a loan, or if you could not repay?
- Could a sale have tax consequences, such as capital gains tax, that affect the net amount?
How secured lending is regulated
Asset-backed loans to consumers are generally credit agreements under the National Credit Act. The lender must be registered with the National Credit Regulator, provide a pre-agreement statement and quotation setting out interest, fees and charges, and carry out the affordability and credit assessments the law requires. The credit agreement sets out early settlement rights, the steps on default, how a pledged asset may be disposed of and how to complain. If a payment is missed, Knox sends a written default notice giving you time to pay. If the arrears are not paid within that period, the loan ends and Knox may sell the pledged goods without a court order. The proceeds settle what you owe: any surplus is paid back to you, and you are not liable for any shortfall. Default interest is charged at the same rate as the loan.
Making the decision
Ask for a written offer to buy and, separately, a pre-agreement quotation for a loan, then compare what you would receive, what you would pay and what you could lose under each. Neither option is better in every case. Individual circumstances differ, so consider speaking to an independent financial adviser, and to a tax practitioner if a sale may give rise to tax.
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.
