We discuss the advantages of gold loans
Also known as loan against gold, loan on gold or gold mortgage
Here, you take a loan against pledged gold be it jewellery or even Sovereign Gold Bonds
Typically, gold loans help you meet a cash requirement by taking a loan against idle gold
Like personal loans, there are no end use specified to gold loans
They can be used for a variety of needs such as emergency expenses, family events and funding small business
Gold loans are significantly cheaper than personal loans
Gold loans help you generate cash out of an idle investment or asset
Gold loans help prevent premature exits from long term investments
Investments for long term goals like child’s higher education and retirement stay on course
Gold loan interest rates are much lower at 7.3-9.0% p.a, going up to 10-15%, and further to 25% depending on providers
The same loan provider will provide loan against gold at a far lower interest rate than personal loan
You can get loans upto 75% of the value of pledged gold
As gold prices rise, you get a higher amount as loan
You get a range of repayment options in bullet payments, EMIs and overdrafts
Overdraft facility is very useful for small business and start ups
You pay interest for the part of the credit line used after raising a loan from pledged gold
There are multiple EMI payment options
You can pay the interest upfront and repay the principal during the loan tenure
You can pay interest during the loan tenure and pay outstanding at its end
You can have a mix of interest and principal in EMIs
Gold loans have the shortest processing time among all loans
Gold loans are often marketed as “Instant Gold Loans”