Gold loans: What are the available types?
What's the story
Gold loans have become a popular financial solution in India, providing quick access to funds without the hassle of extensive paperwork. With gold as collateral, borrowers can avail of loans at competitive interest rates. This article explores five different types of gold loans available in India, each catering to specific needs and preferences. Understanding these options can help individuals make informed decisions when seeking financial assistance through gold-backed lending.
Jewelry loan
Loan against gold jewelry
A loan against gold jewelry is one of the most common types of gold loans. In this case, borrowers pledge their gold ornaments or jewelry as collateral to avail of the loan. The amount sanctioned generally depends on the purity and weight of the gold. This type of loan is ideal for those who need immediate cash without selling their precious belongings.
Coins Loan
Loan against gold coins
Loans against gold coins allow borrowers to pledge their coins as collateral. These loans are usually offered at lower interest rates than unsecured loans, making them an attractive option for those who have invested in gold coins. The amount sanctioned depends on the purity and weight of the coins pledged.
Bars loan
Loan against gold bars
Gold bars are also accepted as collateral for loans by several financial institutions in India. Borrowers can pledge these bars to avail of funds at competitive interest rates. The value of the loan is determined by the market price of gold and purity of the bars.
Instant loan
Instant gold loan
Instant gold loans provide quick access to funds with minimal documentation and processing time. Borrowers can get approval within hours by pledging their gold ornaments or coins as collateral. These loans are ideal for emergencies or urgent financial needs, offering convenience without compromising on security.
Agricultural loan
Agricultural gold loan
Agricultural gold loans are specifically designed for farmers who need financial support for agricultural activities or related expenses. By pledging their agricultural equipment or produce along with personal assets like jewelry or coins, farmers can secure funds at lower interest rates than traditional farming loans without selling off assets permanently.