Gold Loan: Unlock the Value of Your Gold

Picture this: an unexpected medical bill arrives. Or maybe your car needs urgent repairs. What if you could get fast cash without the usual loan hassles? A gold loan could be your answer. It's a popular choice in India though it isn’t as straightforward to get (or easy). Gold loans are a simple form of secured loan

How Gold Loans Work

Gold loans are simple. You pledge your gold as security to a lender. The lender then checks for the quality of the gold that is getting pledged (typically between 18k -22k carats, mix of the gold in the jewellery being pledged, etc.). They then give you a loan based on its value, which is typically upto 75% LTV. You get your gold back once you repay the loan with interest. It's a quick way to turn your gold into ready cash.

The Appraisal Process

First, the lender checks your gold. They look at its purity (carats) and weight. They also check the current market value to determine the right valuation for your pledged ornaments, thereby the amount you can borrow. 

Several things affect how much your gold is worth. The current gold rate is a big factor. Purity also matters; 24k gold is worth more and rarely taken for a pledge. Finally, the weight of the gold in the ornament being pledged matters the most (yes, your ornaments do come with a mix of metals)

Loan Disbursal and Repayment

Once your gold is appraised, the lender decides the loan amount. This is then disbursed to you quickly. You'll receive the money as cash or in your account.

You have options to repay. A typical tenure for a gold loan varies from 6 - 24 months You can pay in EMIs (equated monthly installments). Another way is a bullet payment (paying all at once). Loan tenures vary, some are short-term, others are longer.

Benefits of Choosing a Gold Loan

Why choose a gold loan? They have distinct advantages. Gold loans beat other borrowing methods in some cases.