CASHCENTRAL.com If you own diamonds there are two options you can take to address any liquidity problems you may be experiencing.
One is to sell them to raise money, while the other is using them as collateral for secured loans.
The first option is one many people would have taken in previous years, however, if your diamonds are dear to your heart then this can be a very painful way of generating funds.
With the second option, this is not a problem, as you simply use the diamonds as security, borrow the money you need and then get your diamonds back once you have repaid what you borrowed plus any interest that has built up.
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This latter option has become increasingly popular in recent years. It is not just diamonds that are being used for collateral. Fine art, antiques, wine and jewellery can also be used, depending on the lender, so you have a wide variety of options available to you.
If you intend to take out a loan against diamonds, the stones you are putting forward as collateral will need to be valued.
The majority of lenders have teams of experts who will examine your stones and then produce a final figure as to their value. It is then up to you to decide whether this valuation is fair or not and unless you are a diamond expert, you cannot accurately determine their worth.
Before you send your diamonds away to be valued, you could have them valued by a diamond expert and then compare their final figure with the one produced by your lender and compare them.
Diamond experts assess stones based on the four C's, which are clarity, cut, carat and colour.
Clarity is determined by the number of inclusions your stone boasts. Inclusions refer to imperfections and flaws and are graded according to the Gemmological Institute of America guidelines.
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The cut is decided by the shape of the rough, weight and location of both internal and external flaws. If your stone is well cut, it will allow light to shine through the surface and then reflect it at different angles to create a sparkling effect. In short, the more sparkle your diamond has, the more valuable it is.
Colour is another important consideration. Colour is determined according to a scale which runs from D to S-Z, with D diamonds more valuable than those at the other end of the scale.
The carat is the final criteria taken into consideration. Should your diamond exceed one carat, its value will increase substantially.
Parting with your diamonds can be a traumatic experience, particularly if they have been in your family for generations.
However, with secured loans against diamonds, they only have to be away from you for a short while.
One is to sell them to raise money, while the other is using them as collateral for secured loans.
The first option is one many people would have taken in previous years, however, if your diamonds are dear to your heart then this can be a very painful way of generating funds.
With the second option, this is not a problem, as you simply use the diamonds as security, borrow the money you need and then get your diamonds back once you have repaid what you borrowed plus any interest that has built up.
This latter option has become increasingly popular in recent years. It is not just diamonds that are being used for collateral. Fine art, antiques, wine and jewellery can also be used, depending on the lender, so you have a wide variety of options available to you.
If you intend to take out a loan against diamonds, the stones you are putting forward as collateral will need to be valued.
The majority of lenders have teams of experts who will examine your stones and then produce a final figure as to their value. It is then up to you to decide whether this valuation is fair or not and unless you are a diamond expert, you cannot accurately determine their worth.
Before you send your diamonds away to be valued, you could have them valued by a diamond expert and then compare their final figure with the one produced by your lender and compare them.
Diamond experts assess stones based on the four C's, which are clarity, cut, carat and colour.
Clarity is determined by the number of inclusions your stone boasts. Inclusions refer to imperfections and flaws and are graded according to the Gemmological Institute of America guidelines.
CASHCENTRAL.com
The cut is decided by the shape of the rough, weight and location of both internal and external flaws. If your stone is well cut, it will allow light to shine through the surface and then reflect it at different angles to create a sparkling effect. In short, the more sparkle your diamond has, the more valuable it is.
Colour is another important consideration. Colour is determined according to a scale which runs from D to S-Z, with D diamonds more valuable than those at the other end of the scale.
The carat is the final criteria taken into consideration. Should your diamond exceed one carat, its value will increase substantially.
Parting with your diamonds can be a traumatic experience, particularly if they have been in your family for generations.
However, with secured loans against diamonds, they only have to be away from you for a short while.