For most of the middle-class and upper-middle class families in India, the gold ornaments and articles are used as an occasional accessory and more often than not, the gold stays in the lockers. But the same gold is also considered as an investment. It does take a fair share of the income to invest in gold, but this can be helpful in tough situations.
Gold gives the assurance of arranging funds when the savings fall short to meet the urgent financial needs. Times like this pandemic are unforeseen and there is hardly anything a common man can do about it. People are losing jobs, the businesses are getting shut down and the employees are also getting delayed and truncated salaries. In such a situation, what can be the best deal to get funds for issues like medical emergencies, educational charges and other such inevitable expenses? This is where the gold that is kept safe in the lockers can be used.
Lending money against the gold has been a traditional practice since the very ancient days. Today well-established banks and NBFCs also provide gold loans in a very safe and secure way. The borrowers can pledge their gold as a collateral and get instant funds. They can opt for a suitable way of repayment of this loan and get their gold back.
Although there are many types of loans available but not every loan is as convenient as the gold loans. There are loans for specific causes and the borrower cannot use the funds from such loans for other causes. A personal loan is flexible but it comes with a lot of verification and higher interest rates. This might require you to visit the bank several times till the loan gets finalized. Also, people with a bad CIBIL score will be rejected for this loan. But this is not the case with the gold loans. People with bad CIBIL score can also avail the gold loan and the duration of processing the loan is as less as about an hour.
You have the liberty to use this loan for any cause and the processing charges and rates of interest are less. SBI gold loans come at the lowest rates of interest. The borrower just needs to provide KYC documents and the gold he can pledge. Purity and current market value of the gold largely defines the rates of Gold loan per gram. You should always check the current rates to know better about your loan eligibility.
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