
Gold is a globally recognised store of value, and its low correlation to other assets makes it valuable in low interest rate environments. In 2019, there was a sharp spike of 25% in gold prices and analysts forecasted an additional 12% to 13% gain in 2020. With Covid-19 striking in 2020 and markets suffering a drastic downturn, the safe-haven status of gold has further been proven. Gold’s double digit YTD gains surpassed global equities and other safe-haven assets in the first half of 2020, says the World Gold Council.
Since precious metals witness a significant capital appreciation with time, you could consider a gold loan to secure your future. Gold jewelry can be used as collateral to obtain secured loans with considerably low interest rates. A professional usually measures the purity of the jewelry and gold loan per gram is calculated.
Is Gold Loan a Good Idea?
No matter how carefully you strategize, unexpected cash requirements are a part of life. A gold loan is a convenient way to cater to short term financial needs. The interest rates are stable throughout the tenure and the loan amount is disbursed within a few hours. Taking a loan against gold would mean an interest rate of 12% to 21% per year. In case your requirements have been fulfilled before the tenure ends, you can pre-pay to save on the interest amount. The funds begin from ₹ 10,000 and goes up to ₹10, 00,000.
The entire process is extremely hassle-free which is why many people prefer loans against their gold jewelry. The eligibility and documentation required is quite basic. You are only required to be an Indian resident and deposit gold which you own. Additionally, only address and identity proof along with a blank cheque and photograph is required by the bank.
Here are a few reasons other reasons why the loan could be of great help.
Efficient Business Financing
No matter big or small, you business must have a strong financial footing. One of the safest ways is to invest your own money. Make use of your savings, fixed deposits and emergency funds. But additionally, you can also use a gold loan since they can be used for any purpose and come with no restrictions or conditions. While you use the fund to ensure seamless operations, the gold lies safe and secure under surveillance at all times.
Caters to Emergencies
Having a contingency plan for life includes sufficient cash reserve. An efficient loan can save you from financial shocks in unforeseen situations. Be it a medical emergency, natural disaster, job loss, bankruptcy or sudden death of a spouse, taking a gold loan could take care of immediate cash requirements. Additionally, it can also help in case you have to make big purchases, like a home renovation or sending children to foreign universities.
Quick Fix Solution
Gold loans do not take up to 3 days to get disbursed. You can receive the amount within just few hours. All you need to do is visit your nearest bank branch once or apply for an online gold loan. The metal is generally evaluated in your presence.
Before applying for a gold loan, remember that gold coins and bars cannot be used. Get in touch with the sales team of your nearest branch for detailed information.








