How to get a loan secured by your fine artwork

If fine art is a considerable part of your net worth, it may be advantageous to use it as collateral for a loan. With the fine-art market booming, you could borrow the amount you need and qualify for competitive loan terms. But as with all secured loans, default means you'll lose your collateral

Can I use my fine art as collateral for a loan?

Yes, it’s possible to use fine art as collateral for a loan. Lenders that specialize in using artwork as collateral generally provide loans from 30% to 80% of the piece’s value. Your piece will likely need to meet some specific requirements, and the overall market will be used to assess the value of a piece. Supply and demand, auction data, records and information about the artist are just a few factors that can be used in determining if your piece is acceptable as collateral.

How the process works

Each lender may have processes that vary slightly, but the basic steps are typically similar.

1. Contact the lender. Give details about the art you’d like to use and what type of loan you’re looking for if more than one type is offered.
2. Schedule an appraisal. This will likely be done at an office location, though some accommodations may be made if your piece is valuable enough or difficult to transport.
3. Review the terms. You’ll be able to accept or reject the terms offered to you and go over any questions you may have.
4. Schedule for the art to be transported. Either you will transport or the lender will transport your piece to a secure facility.
5. Begin repayments. Once the loan is paid off, your art is returned to you.

Which lenders offer art-backed loans?

What are the benefits of using my fine art as collateral for a loan?

• Potentially borrow up to 80% of your fine artwork’s value
• Secured loans generally come with a lower interest rates
• You don’t lose ownership of your artwork if you pay back the loan per the agreement
• These are nonrecourse loans, meaning your art serves as the collateral and you don't need to offer a personal guarantee

What are some disadvantages of art-backed lending?

• You may have to pay for the transportation to and from the designated holding facility
• Locations of lenders that specialize in these loans are limited
• Defaulting on the loan can mean the loss of your fine art and potentially collections actions
• Despite security measures, there’s always the risk of something happening to your piece if it's in the lender's possession

7 features to consider when choosing a lender

Here are seven additional factors to consider aside from the standard APR, loan term, amount available to borrow and turnaround time:

1. Appraisal. What is the lender’s appraisal process like? Find out if you’ll need to send in high-quality pictures and details, if an appraiser will come to your home, if you need to ship your piece somewhere or if you’ll have to take the piece to the lender.
2. Loan-to-value ratio. What percentage of the value of your artwork can you borrow?
3. Credit check. Look into whether the lender requires a credit check for you to be approved for an art-backed loan.
4. Insurance policy. If the lender takes possession of the piece, make sure it remains properly insured. Take into consideration if the lender charges extra for the insurance or not.
5. Fees. Certain lenders require that you front the cost of transportation, others provide it free of charge. Prepayment fees and late fees may also add to the cost of your loan, so inquire with lenders about fee structures.
6. Extensions. Hiccups can happen and you may be unable to pay the loan off by the term. See if potential lenders offer extensions or are willing to renegotiate terms. Some are willing to so long as you can pay the interest due each month.
7. Default policy. Possibly the biggest thing to consider is the company’s default policy. With your fine artwork on the line, it’s important to consider and fully understand the terms of a default should it come to that.

Unsecured personal loans to consider

Want to loan that doesn't require collateral instead? Compare these online providers.

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Name	Product	Filter Values	APR	Min. Credit Score	Loan Amount
Credible personal loans			3.99% to 35.99%	Fair to excellent credit	$600 to $100,000	Get personalized rates in minutes and then choose an offer from a selection of top online lenders.	Go to site	Compare	loading Fetching your data…
Best Egg personal loans			5.99% to 35.99%	600	$2,000 to $50,000	A prime online lending platform with multiple repayment methods.	Go to site	Compare	loading Fetching your data…
Upstart personal loans			5.4% to 35.99%	None	$1,000 to $50,000	This service looks beyond your credit score to get you a competitive-rate personal loan.	Go to site	Compare	loading Fetching your data…
Upgrade personal loans			5.94% to 35.97%	600	$1,000 to $50,000	Affordable loans with two simple repayment terms and no prepayment penalties.	Go to site	Compare	loading Fetching your data…
LendingPoint personal loans			7.99% to 35.99%	585	$2,000 to $36,500	Get a personal loan with reasonable rates even if you have a fair credit score in the 600s.	Go to site	Compare	loading Fetching your data…
SoFi personal loans			6.99 to 22.23%	680	$5,000 to $100,000	A highly-rated lender with competitive rates, high loan amounts and no fees.	Go to site	Compare	loading Fetching your data…
LendingClub personal loans			6.34% to 35.89%	600	$1,000 to $40,000	A peer-to-peer lender offering fair rates based on your credit score.	Go to site	Compare	loading Fetching your data…
Monevo personal loans			1.99% to 35.99%	None	$500 to $100,000	Quickly compare multiple online lenders with competitive rates depending on your credit.	Go to site	Compare	loading Fetching your data…

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Bottom line

Art is often worth more to its owner than the market value. Instead of selling a treasured piece, you may be able to work with a lender that will take the piece as collateral. While it can be a good way to get a loan without a credit check, it can also impact your credit score in other ways if you don’t meet the terms of the loan. Be sure to compare your options for secured loans and unsecured loans and fully assess the risks and benefits before you commit to any loan.

Frequently asked questions

Should I sell my fine artwork instead?

It depends on the amount you’re looking to receive, when you need the funds, the market and if you’re willing to part with the piece

When calculating the full value of a piece, it’s important to note that you will be charged to sell fine artwork in most auction houses. You may also have to consider taxes based on the money you earn from a sale.

If you decide to sell, you could a luxury sale advance loan to get quicker access to the cash before the sale is finalized.

What do I do if my piece isn’t accepted?

Other loan options are available based on your needs. You may also get a different piece appraised if you believe it will fare better.

Do I need to have a good credit score?

Not necessarily. Ask the lender you’re thinking of working with if a credit check is part of the approval process.

Can I use other luxury items as collateral?

Some lenders will accept antiques, luxury cars and watches, fine wine and jewelry as collateral. There are a variety of items that can be used as collateral, so find out what lenders accept before you commit.