
The range of possessions that can be used as collateral for loans in South Africa may be greater than you realise. The loan provider and loan type will determine which assets are accepted.
Types of collateral typically accepted by banks
Generally, banks are the go-to lenders for home loans, vehicle financing and big-ticket items that take longer to pay off. The key assets used to secure bank loans are the properties or vehicles purchased with the borrowed funds.
Cash in a savings or money market account, shares, unit trusts, bonds, Krugerrands and insurance policies may be considered as collateral for a loan due to their easy liquidity.
Bank loans can be subject to strict conditions, such as only being able to use the funds for a specific purpose. The lender may also require proof of income to support the loan.
Collateral for personal loans in South Africa
Alternative lenders are more accommodating when it comes to securing personal loans or any other vehicle of short-term funding. Collateral can be anything of value – antiques, original artworks, jewellery, designer handbags, luxury wristwatches, boats, cars and other vehicles.
Loan providers consider the ease and speed at which the collateral can be sold before arriving at a loan amount. Assets that are in demand are more readily accepted as collateral than those that aren’t.
Collateral for business loans
Business loans are essentially a type of asset-based loan. Collateral can be in the form of machinery or equipment, inventory, accounts receivable and warehousing, or other types of business facilities.
Some financial services companies in South Africa provide short-term business funding secured by purchase orders and government tenders.
Advantages of collateral loans
Collateral loans or, alternatively, secured loans are a quick and discreet way to raise funds.
Advantages include:
- lower interest rates
- flexible repayment terms
- higher loan amounts
- quick turnaround times
- easy loan approvals
- no credit checks.
What we offer at LoanAgainst
LoanAgainst is a specialist asset-based loan provider in South Africa. A wide range of luxury items can be used as collateral for loans – cars, watches, jewellery, motorbikes, trucks, antiques, art, yachts and boats.
Assets must be free of debt and fully owned by the applicant. Proof of ownership may be required.
The amount of funding available is commensurate with a percentage of the collateral’s appraised value.
We’re a division of an accredited finance provider with branches in Cape Town, Johannesburg, Durban and Port Elizabeth. Apply online now or contact us on 079 726 4690.