Risk
The Downside, Before You Sign
The real risk of borrowing rather than selling, explained properly rather than in a footnote.
No credit check and no obligation. If borrowing is the wrong instrument for your situation, that is what you will hear first.
What a margin call is
The loan is advanced against a percentage of your gold's market value. If the gold price falls materially, that percentage rises — the debt has not changed but the collateral behind it is worth less.
At that point we may contact you to bring the loan-to-value back into range, by adding collateral or paying down part of the balance. That contact is the margin call.
Why the advance is only 65%
The gap between the advance and the value absorbs an ordinary price move. A lender advancing ninety percent against a volatile asset is not being generous — it is creating a risk that becomes yours, because the call arrives far sooner.
How to make it unlikely to matter
Borrow well below the maximum. That single decision puts real distance between you and any call, and it is the most effective thing available to you.
Keep unpledged metal in reserve so adding collateral is straightforward. And do not take a loan whose repayment depends on the gold price rising — that is a leveraged position, not a financing decision, and a fall hits you twice.
If you cannot meet a call
Talk to us early. Every version of this goes better with notice.
If the loan cannot be brought back into range, the collateral covers the debt. That is what secured means, and anyone who will not say it plainly is not being straight with you.
FAQ
Common questions
- How far does gold have to fall?
- It depends how much you borrowed against the value. Borrowing well under the ceiling leaves substantially more room.
- Can I add collateral instead of paying down?
- Yes. Either restores the ratio and borrowers use both.
- Is my gold sold immediately?
- No. A margin call is a request to restore the ratio, not a liquidation.
- Is this like a pawn forfeiture?
- No. Different product, different structure, and no short forfeit date.
Next step
Run it both ways before you decide.
No credit check and no obligation. Tell us what you hold and what the money is for, and if selling is the better answer for your situation you will be told that first.
Business purpose only. Not available in Nevada, Vermont, North Dakota and South Dakota.