Types of Loans
Types of Loans- Gold Loans
Gold has been a valued asset in Indian households for ages. This loan helps families realize the latent potential of their gold assets and use them for financing their personal needs. A gold loan is a loan where gold jewellery or coins or bars are given as collateral. The bank or the NBFC sanctions a certain percentage of the pledged gold value as the loan which is usually determined by the current price of gold in the market.
These loans are ideal for meeting short term needs of the family and hence have a shorter tenure starting from 3-months only. This is the fastest and easiest loan to obtain in India since it is backed by time-tested collateral whose value increases exponentially with every passing year. Since it involves gold, these loans have a low-interest rate as well.
While gold loans originated among the money lenders in South India, today, many leading banks and NBFCs in India offer gold loans.