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Is gold loan a good idea?

Getting a Gold Loan is simple; anyone who has idle gold – in the form of jewelry can pledge their gold to get financial assistance. A Gold Loan is a practical way to secure funding without liquidating your long-term investments. And with the gold prices at an all-time high, you can get good value for this investment.

Is a loan the right product for you?

A loan is one of several types of credit that you can apply for, but it might not necessarily be the right option for you. The likes of credit cards, store credit and Buy Now, Pay Later agreements are all viable alternatives, depending on what you’re buying. 

If you have had several loan applications rejected, it’s a good idea to consider whether an alternative could be a good option for you before proceeding with another loan application.

Secured Loans

Secured loans are loans that require some sort of collateral to be provided as security for the loan. Collateral can be anything from jewelry to real estate. If you don’t pay back the loan, the lender can take possession of the collateral that you pledged and sell it to recover its principal and interest debts.

The loan amount is based on the value of the security, and the interest rate is fixed. These types of loans are fixed-rate loans, and they are not adjustable.The main advantage of these types of loans is that they are easy to get

Gold Loans

A gold loan is a type of secured loan that you can get with the help of your gold. It is a good option for those who have their own gold and want to use it as collateral for a secured loan. These loans are generally used for short-term needs and come with a shorter repayment tenure when compared with other secured loans like home loans and loan against property.

What is the rule of gold loan?

A circular issued by the RBI relaxed the lending norms for gold loans by increasing the LTV from 75% to 90%. The RBI guidelines for gold loans allow lenders, whether banks or NBFCs, to lend up to 90% of the gold jewellery value

Can we pay gold loan monthly?

The different ways to repay the gold loan include paying the principal amount and interest amount equally in monthly instalments, paying the interest amount as EMIs and paying the principal amount at the end of tenure, making partial repayments based on fund availability throughout the tenure, and bullet repayment.

Final Thoughts

Loans are an important resource that individuals can use to accomplish a variety of goals. Whether you want to buy a home, start a small business, or finance a new car, a loan can be an invaluable resource. Knowing the types of loans available to you in India will help you when you need funds that you haven’t budgeted for, so make sure you have the necessary information and stay prepared.