Why should you opt for a gold loan?
Every Indian household considers gold to be one of the most important assets, carrying monetary and emotional value. Hence, the security of your gold is one of your biggest worries. But emergencies call for drastic measures.
However, many questions arise on whether this is the right choice, like even after getting a gold loan, will you be able to fulfil all your financial obligations? This article will explore the answers to these questions and much more.
Benefits of a gold loan
Here is a quick sneak peek at the features and benefits of taking a loan against gold.
This will help you better evaluate the option and check whether it aligns well with your requirements.
1. High loan amount
Gold is one of the most highly-priced assets in the world. Gold prices continue to fluctuate, and the value keeps changing in the international market.
However, the price of gold is usually on the higher side, increasing your borrowing capacity. The loan offered to you is based on the Loan to Value (LTV) ratio. It considers the present market value of your gold, a percentage of which is offered to you as credit.
You can get up to 75% of your gold’s value as a loan.
The purity of gold also plays an important role in determining the amount you are eligible to borrow. It should be 18 Karats and above. Only then can you get a loan against it.
If you pledge gold of higher purity and if the LTV offered is high, you can borrow a large sum from the lender.
This can help you fulfil major expenses like paying hefty hospital bills, financing a wedding ceremony, or funding your child’s education.
2. Low interest rates
When applying for a loan against gold, you are opting for a loan that falls under the secured category. This means that you are providing
