A gold necklace tucked away in the drawer could be worth more than you know. The same goes for the old bracelet, broken chain or collection of rings you’ve stopped wearing. They could help you see a way to cash in when money is low.
For the gold loans Perth user, the question is – does borrowing to cover their jewellery make more sense than selling their gold?
A gold-backed loan offers the opportunity to use eligible items held in your possession as security when borrowing money. You may be able to reclaim your jewellery at the end of the deal, once the money and any applicable fees have been paid. But selling means a agreed payout and the relinquishing of ownership of your gold.
Whether you should opt for borrowing or selling depends on the value of your gold, how soon you need the money and if you can comfortably put some money aside to pay off the loan.
How Gold Loans Work in Perth
While there are some variations, gold loans in Perth tend to come from pawnbrokers and other businesses who offer to hold your gold as security for a loan.
Take your gold to the lender and get an estimate as to what they are happy to lend based on the content of the gold. This could be dependant on how much gold the item contains, their own selling price and the internal valuation process of the lender.
If you decide to accept the terms, the lender will look after your gold until the loan is settled with them.
Before committing you should ask yourself the following.
- What are you getting?
- What about interest and fees?
- When does the money become yours?
- How much do I have to pay to get my jewellery back?
- Can I take time out or extend the loan period?
- Can I pay back some or all of the monies in advance?
For example – a $700 loan does not necessarily mean you will pay only $700 to recover your jewellery. Interest and fees can add to the total amount due that you’ll need to get back from elsewhere.
Ask for the written breakdown of charges rather than going on a verbal pitch.
What Affects The Value Of Your Gold?
Your gold jewellery doesn’t have a set value. Two rings that look the same could contain significantly different amounts of gold.
The first consideration is that Australian jewellery tends to be marked with its carat weight such as 9ct, 14ct or 18ct, though you may not be able to identify the hallmark.
Pure gold means 24 carat, so an 18ct item for example is 75% real gold, whereas 9ct gold is only 37.5%.
As with most things, weight is a consideration. A heavy necklace contains more gold than a fine chain of the same purity. But other factors such as stones and clasps can come into play.
The value of gold tends to follow the spot price on the international markets, but that won’t necessarily reflect how much a customer is looking to pay as businesses account for their costs.
A loan offer can also be less than an estimated resale value since businesses are taking on credit with gold as the security.
Gold Loans Perth or Selling Your Jewellery?
The main differences between the two options are how much cash you get, if you can reclaim your gold and if you’ll end up owing more than you thought when repaying a loan.
| Gold loan | Selling gold |
|---|---|
| Uses gold you own to secure a loan | Gives ownership of gold to whoever pays for it |
| Lender requires you to pay back cash | Paid for gold immediately |
| Interest and fees may be due | No borrowing interest is payable |
| You can keep your gold once terms met | Once sold is final |
| You can lose the pledge if you default | Ownership transferred when sold |
If you value the sentiment of your family heirloom and like the possibility to recover it if you can make payments in future, borrowing may be appealing.
If it holds no value and you don’t want the added risk and commitment of another loan, selling may be the best option.
You will need to compare the actual offers and not assume that one side will result in cash being provided sooner.
Where to Get a Gold Valuation in Perth
Before borrowing or selling find out what your gold is likely to be worth.
A good valuation can break the item down in terms of purity, the eligible weight and why it might support their offer. For items with diamonds or other gemstones it’s important to confirm whether those elements have been tested separately before accepting a valuation.
Those in Perth considering a sale can find alternatives to pawnbroking. Look up specialist precious-metal buyers as well as your local pawnbrokers.
One business to consider when researching their options as a seller gold is Gold Buyers Perth. Their website provides a starting point for finding out more about the company and what you can expect before taking an assessment in-store.
It’s important to remember the difference between a gold-buying service and a gold lender. A business that buys your jewellery won’t necessarily offer a secured loan.
If you’re looking to borrow money specifically and have the option to reclaim your jewellery, confirm that the business offers secured lending prior to booking your visit.
Check the Full Cost Before Accepting a Gold Loan
A small difference in cost can make an appreciable difference to your loan.
Assuming a lender is offering you $1,000 against your jewellery. If the agreed charges total $120 over the period of the loan, you’d need $1,120 to recover the item assuming no other fees are payable.
This is an example figure, not a quoted rate.
When comparing offers, ask for how much you’ll need to put back to them on the day you expect to settle the debt.
Find out what happens if you need more time and whether this adds to the overall cost.
Pawnbroking in Western Australia has legal guidelines and requirements that consumers are encouraged to familiarise themselves with including current licensing information via the WA Department of Local Government, Industry Regulation and Safety.
Consumers are also encouraged to read through consumer information from Moneysmart when weighing borrowing costs and financial options.
Make sure that you don’t sign onto any agreement until you know how much you owe and when.
Can You Sell Broken or Unwanted Gold Instead?
A broken bracelet or mismatched pair of earrings may be a useless item, but they could still be valuable to a lender.
Though each gold-buying service offers slightly different criteria, gold buyers generally look to assess your jewellery in terms of how much precious metal content there is in it.
It may be possible to have your old chains, rings or single earring assessed. Other items that may be eligible for assessment include unwanted bangles and scrap gold.
If you have multiple items and want to know the value of a full sale, ask for an itemised valuation so that it is easier to compare and understand your options. This could be useful if you decide to sell some items and not others.
For Perth sellers, Gold Buyers Perth is another point of comparison when browsing local gold-buying options. Confirm the current purchasing criteria and identification requirements directly prior to making any arrangements.
Why Gold Selling Prices Differ Between Australian Cities
Those looking to research the value of gold online may come across a search such as sell gold Melbourne. This is useful for gaining an understanding of how gold-selling services work, but a Melbourne advertised price shouldn’t be used as an assumed Perth price.
The underlying gold market is international in nature, but individual sellers offer differing terms when it comes to valuing the same gold.
Some of the reasons for a difference can include factors such as testing processes, operating costs, the quantity of gold being sold and the margin of the buyer.
What matters is a quoted price per gram and which purity it applies to. A price for a 24ct gold can’t be compared directly with a price for 9ct jewellery.
If you want to compare accurately, ask for offers based on the same item’s weight and purity, preferably at similar dates.
What to Take When Visiting a Gold Buyer or Pawnbroker
Prepare your gold before heading to your appointment and separate your jewellery by carat where possible.
You don’t need to polish or repair broken pieces simply to request a precious-metal valuation.
Bring your ID and any additional documents you may have or ask the business what identification is required.
If you are visiting a pawnbroker, ask for a copy of the agreement and store it somewhere safe to access when organising repayment or collecting your item.
For a sale, request a receipt detailing the transaction and how much was paid.
When Keeping Your Gold Makes More Sense
Not every valuable item should be sold to raise cash.
Family jewellery, inherited pieces and rings tied to special events could be impossible or impractical to replace even when their metal value is low.
If losing the item would cause you serious regret, consider alternative options to meet their expenses before pledging it as a security deposit.
You should also take into account certainty of repayment terms. A gold loan can be a good option when you will have reliable funds to repay prior to the due date but can be risky when repayment will be dependant on income that hasn’t been confirmed.
For people who are comfortable parting with unwanted jewellery can opt for a simple sale to avoid the continued responsibility of repayment.
Questions Worth Asking Before You Hand Over Your Gold
Whether you’re meeting with a lender or a buyer, the person assessing your jewellery should be able to answer any questions that you have.
Ask about how purity is tested, whether the item will be weighed in front of you and how the offer is calculated.
For a loan, ask about late payments, extensions, storage, insurance and the procedure for recovering your jewellery.
For a sale ask if the offer is final, when payment will be made and whether any deductions are applied.
You can use the Gold Buyers Perth website when researching a local selling option, but the best choice will reflect the actual written offers and terms that you receive before your deal.
What matters is the highest amount offered, not necessarily the largest amount. As for borrowing, what matters is the actual amount you need to pay to reclaim your gold.
