Collateral Loans in Botswana

Nov 22, 2023 | Lenders & loans

Collateral Loans in Botswana

Bank loans are one option when you find yourself in need of cash. However, there are different loan options available that have many advantages over traditional loan options.

In this article, we look at collateral loans in Botswana and how they work:

What are collateral loans?

A collateral loan is a secured loan that uses a personal or business asset as collateral. This means the loan is secured by an asset of value, such as a property or a vehicle.

An unsecured loan doesn’t use collateral. Instead, a bank or other lender uses your credit score and income to determine whether a loan should be approved.

When a collateral loan is a good idea (and when it isn’t)

A collateral loan is usually a short-term loan that covers a temporary lack of funds. It works best when you know you’re going to be able to pay back the loan in the coming months.

Someone might consider a collateral loan when there’s an unexpected expense, such as a vet’s bill or car repairs, and they can’t cover the costs upfront. A collateral loan can be repaid over a few months.

Collateral loans can also help businesses grow by covering the upfront material and staffing costs for a lucrative new project, taking advantage of a time-sensitive investment opportunity, or investing in new equipment at a never-to-be-repeated price.

However, collateral loans are not a good idea if you’re heavily in debt or aren’t sure if you’ll be in a position to repay the loan. You could end up losing your asset.

Some advantages of collateral loans over other loan types

Collateral loans are simply a different type of loan. They have a few key advantages.

No credit rating affect. Collateral loans are secured by assets, so there’s no need to check credit scores and the loan doesn’t affect your credit score.

No need to disclose your income. As long as the value of the asset covers the loan amount, there should be no need to submit your income or payslip.

Loans are fast and discreet. Collateral loans are usually approved and paid out within 24 hours.

Applications are simple and transparent. The application process is simple and doesn’t require lots of paperwork and supporting documentation.

Types of collateral accepted for loans

Most items of value can be used as collateral. The item must be fully paid off and owned by the borrower.

Common items used to secure collateral loans include:

  • cars (including vintage cars and motorcycles)
  • boats, yachts and planes
  • jewellery and diamonds
  • gold (including gold coins)
  • fine art and antiques
  • luxury watches (new and antique)
  • other luxury items such as designer handbags
  • commercial property (for business loans).

Collateral loans in Botswana

Collateral loans are available in Botswana through asset-based lenders like Lamna. Because the loan is secured by an asset, the loan amount is based on the resale value of the asset.

Once approved for a collateral loan, the lender takes possession of the asset as security for the duration of the loan.

Once the loan is repaid in full, the asset is returned. The loan doesn’t affect ownership of the asset in any way.

Next steps: how to get a collateral loan in Gaborone

To get a collateral loan from Lamna Botswana, apply online with the relevant information about your asset. We’ll give you a provisional loan quote to get the ball rolling.

The asset must be brought to our offices in Phakalane, Gaborone to be appraised. Then we can proceed with the loan agreement. The funds will be transferred directly into your bank account within 24 hours.

To find out more about collateral loans in Botswana with Lamna, call us on 71 388 088 or contact us online.

Complete our Online Application Form

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