tisdag 12 april 2016

Newfound source for loan collateral – Handbags!


In the Forbes article by Cecilia Rodriguez, she discusses a new source of collateral that you can use to be able to take out a loan. This source is luxurious designer handbags such as, Louis Vuitton, Hermès & Chanel etc.

As most people, no matter how wealthy they are, tend to at some point in their lives take out a loan for something. Usually this tends to be for things such as houses where banks can reclaim the house if the person, who was granted the loan, is unable to pay it back.

It is now becoming a new trend amongst (mostly) women, to use their designer handbags as collateral when taking out a loan.

Since many handbags of designer brands can have a very high value, depending on how old they are (vintage) and if they are part of a very exclusive collection, using them as collateral is a clever and innovative way of handling your personal financial business.

Looking at this through the eyes of the person taking out a loan, it is a good alternative to using your house as collateral.

If you have been unable to pay back your loan and the bank is reclaiming the collateral, you would most likely be happier losing a handbag than losing your house.

However, even though some designer handbags may be of high worth, their value can vary drastically which means that using them as collateral may not always be the best idea. Another risk is that, even though the bank would have had it valued beforehand and ensured that there is a market for it, there is nothing that guarantees that the bag would not be damaged is some way or even stolen.

This could be a problem if it would happen that the bank would need to reclaim it and the person with the loan would have no way of paying it back and would be stuck with a big problem that would be hard for an individual to solve.

To conclude, banks are always analysing facts and making sure it is a relatively low risk to granting people loans. This would ensure that the bank is aware of risks and possible outcomes of having handbags used as collateral and if a person is granted a loan, the bank is confident that this is a safe option.

As for the individual taking a loan, they may feel a lot more comfortable taking a loan in the first place if they are allowed to use their handbags.


All in all, as a new innovative way of having collaterals for loans this is a good idea if risks can be minimised as both parts gains from it. The bank has a customer who is comfortable with the terms of the loan, and the bank is maintaining business.

Bibliography:
http://www.spentmydollars.com/wp-content/uploads/2015/03/bags-2Bmust-2Bhave-2Btop-2Bdesigner-2Bhandbags-2Bfashion-2Btrends-2B2015-2B2016-2Bwomens-2Bbags-2Bgivenchy-2Bsaint-2Blaurent-2Bfendi-2Bchanel-2Bmichael-2Bkors-2Bdior-2Bbalenciaga-2Bit-2Bmust-2Bhave-2Bbags-2B.png 

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