Outlook Money
A gold loan is a type of secured loan where you borrow money by pledging your gold ornaments, coins or bars as collateral
It can easily be obtained from any bank against your jewellery or bullion. It may be of great help in case of an emergency or for meeting short-term goals.
As your own gold is set to be a collateral, the repayment interest collected by bank is set lower than that on credit cards or personal loans.
It is a good option for those whose gold is not in use. They can use it as a collateral to get out of financial exigencies.
A gold loan extends a large amount of flexibility in usage of the sum acquired with the loan. Banks do not set restriction as to how the loan amount must be used.
During the loan tenure, the leveraged gold lies secure with the lender. However, in case of failure to repay the loan, the lender can sell your plegded gold to recover the loan amount.