When you’re rich on paper but don’t have much cash to cover your day-to-day expenses, you might want to consider selling one of your luxury items and taking out a luxury sale advance loan. You’ll get a percentage of the item’s value upfront and get help with the sale in exchange for interest and fees.
What exactly is a luxury sale advance loan?
A luxury sale advance loan is a type of financing that allows you to access the cash value of expensive items you own and want to sell. They’re designed for borrowers who have money tied up in luxury items and limited access to funds they can spend.
Your lender appraises the item you want to sell and lets you borrow a percentage of its estimated value, usually around 70%. Once you have the funds, your lender typically works on selling your item through its network of buyers or offer you help selling the item — usually within a fixed amount of time. After you’ve made the sale, the lender takes the amount you owe plus interest and fees and gives you the remainder of the profit.
Luxury sale advance loans usually don’t involve credit checks or income verification and generally have less rigorous eligibility requirements than your typical personal loan. But if your item doesn’t sell and you’re unable to pay off your loan, you could lose ownership of your property.
What providers offer luxury sale advance loans?
When it comes to luxury sale advance loans, you have several options. You can go through a luxury sale advance lender that works with most items and across the US. You can also get a luxury sale advance loan from a provider that specializes in one particular item — like cars or jewelry — or only works in your area. Another option is to go directly through auction houses or art dealers to get the advance.
These three providers are some of the top options for people looking to get an advance on the sale of a luxury item.
Borro sale advance loans work by appraising the art, watch or jewelry you want to sell and giving you an advance up to 70% of the estimated selling price. It then works with its network to sell your item, charging a fixed rate of 1% to 2% in interest on your advance and a sales fee of 15% to 20% of your item’s value. Once the item is sold, Borro deducts all fees, interest and the amount you borrowed before giving you the remaining funds. If your item doesn’t sell, you have up to six months to pay off your loan.
Borro doesn’t conduct a credit check, though you’ll be required to provide identification. You’ll also need to provide proof of ownership — a will, deed, title or receipt, have an item valued at at least $70,000 or $80,000 and have a US bank account to qualify.
You can contact Borro directly to start the process and receive an estimate on how much you can borrow. If you’re interested in continuing, you can either send your item to Borro to have it appraised at one of its offices or have an expert come to you for delicate or expensive items.
After the appraisal, you’ll fill out some paperwork and undergo an identity check. You can have your funds transferred to your account as soon as the same day. Borro then collects and stores your asset during the sales process.
Read our review of Borro
Similar to Borro, Vorrow works by appraising your luxury item and lending you between 30% and 70% of its estimated market value, depending on the type of asset. Vorrow then takes your assets and puts your item up for sale for 30 days through its network of buyers. If your item doesn’t sell, you have four months from the day you signed your loan documents to pay it off.
Vorrow doesn’t conduct any income or credit checks on its borrowers. The only real requirement is that your item is worth more than $5,000 and qualifies as a luxury item.
To sign up, visit Vorrow’s website and fill out a quick form to get an estimate on your item — it helps if you can provide pictures. If you like the estimate, set up an appointment to have your item appraised in person in its offices or have an expert appraiser come to you. Once the appraisal process is complete, all you have to do is fill out some basic paperwork and sign the contract before getting your funds. During the funding process, Vorrow arranges to pick up your item and store it in a private storage facility while it works on the consignment process.
Evan Paul is an exotic car dealership located in Orange County, California that provides sale advance loans on luxury vehicles to residents of California. Once you put your car up for consignment, you may be able to borrow up to 75% of the vehicle’s value depending on the vehicle and its mileage.
Like other sale advance loans, Evan Paul doesn’t have any credit requirements and doesn’t report to credit bureaus. There are also no restrictions on how much your car is worth — you can use sale advance for any functioning vehicle. However, the person listed on the vehicle’s title must have a California driver’s license to qualify.
To sign up, submit an application online and drop off your car for an evaluation. You’ll get a wire transfer of the amount you’re borrowing within 24 hours of signing your documents while Evan Paul arranges to sell your car.
What luxury items could I get a sale advance loan on?
You can get a luxury sale advance on most luxury items, including:
Precious stones and metals
Luxury boats and yachts
Designer hand bags
Have another luxury item you’d like to sell for quick money? Reach out to your lender to see if it’s acceptable — chances are it is.
What happens if my item doesn’t sell?
Most luxury sale advance loan providers put your luxury item on sale for around 30 days. If it sells, then the interest and fees are taken out of the sale. But if you don’t sell your item, you’re still on the hook for repaying your loan according to your contract’s agreements.
These often come with short terms — sometimes as little as four months — and could come with potentially high repayments depending on how much you took out. If you aren’t able to repay the loan, you’ll likely have to give up ownership of the luxury item.
Some lenders come with the option of extending the loan, which could be helpful if the worst happens and your item doesn’t sell. But take caution when extending your loan: You’ll pay more in interest.
What if I don't want to sell my item?
Many lenders, including Borro, have options for those looking to retain their assets while borrowing against them. Known as a luxury asset loan, these use your valuables as collateral. This results in lower interest rates, larger loan amounts and usually no credit checks.
However, it comes at a price: These loans tend to have shorter terms — typically less than two years. If you’re unable to repay your loan, your assets will be repossessed, and you may owe the lender if the item can’t cover your remaining debt. This can leave you in a worse position, so contact a financial advisor before you make any major loan decisions.
How do I choose the best provider for me?
Finding the right provider for you depends on what type of item you have, how much you want to borrow and a few other factors, including:
Items accepted. While you can find lenders like Borro and Vorrow that accept most luxury items, some specialize in one thing, like jewelry or cars. Make sure the lender accepts the item you’d like to sell before applying.
Selling help. How much help will the lender provide for selling the item? If you aren’t experienced, you might want to go for a lender that completely takes care of the sale.
Rates and fees. You’ll have to pay interest and fees on the amount you borrow, which can add up if your item takes a while to sell or doesn’t sell at all. These aren’t always listed on the lender’s site and can vary by item. To get a more accurate idea of how much you’ll pay, reach out to the lender to get an estimate.
Eligibility. Just because providers typically don’t run a credit check doesn’t mean you won’t have to meet other eligibility requirements. Typically, you’ll need to have proof of ownership, be of legal borrowing age in your state and be a US citizen or permanent resident. You might also be required to have items worth a minimum amount and live in a particular state.
Loan term. Ideally, your item will sell quickly and your loan term won’t matter. However, in the event that your lender isn’t able to sell it in time, finding a longer loan term gives you more time to pay off your debt and can help you avoid unaffordable monthly repayments.
5 alternatives to consider
When it comes to luxury items, a sale advance loan isn’t your only financing option. You might also want to consider the following:
Secured personal loans. Rather than selling your luxury item, you can put it up for collateral when taking out a personal loan. By securing your loan with a luxury item, you could qualify for higher amounts and lower rates. Plus, you won’t have to risk paying off a pricey short-term loan if your item doesn’t sell.
Bridge loans. A bridge loan is a type of short-term secured personal loan that acts as an advance on an item you sell yourself — often used to pay for a new item. Bridge loans are most common with real estate, but you can also use luxury assets to secure them.
401(k) loans. Want to avoid a credit check? You can also borrow from your retirement account and pay it back with relatively low interest rates. You’ll want to have solid job security with this option, however — if you leave your current employer, you could potentially be on the hook for hefty fees and drain your retirement savings.
Selling it yourself. If time isn’t of the absolute essence, you might want to consider simply selling your luxury item yourself. You’ll get its full value and won’t have to worry about paying off an expensive short-term loan if it takes longer than expected to reach a deal with a buyer.
Personal loan providers to consider
Not selling a luxury item now or want a loan separate from the sale? Compare our selection of personal loan providers.
Luxury sale advance loans are one way to quickly access the cash value on an expensive item. They can make the selling process significantly easier — most take care of the sales for you. However, you risk having to pay off a large short-term loan if the sale isn’t successful and losing the item if you default. Be aware of the risks before taking out a luxury sale advance loan and compare your options.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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