Gold Loan
What is a Gold Loan?
A gold loan is a type of secured loan where borrowers pledge their gold jewelry or coins as collateral to obtain quick cash from banks or financial institutions. The loan amount is typically a percentage of the current market value of the gold.
Gold loans are popular because they offer:
- Fast approval and disbursal
- Minimal documentation
- Lower interest rates compared to unsecured loans
The borrower repays the loan with interest over a fixed period, and once fully repaid, the gold is returned. If the borrower defaults, the lender has the right to sell the pledged gold to recover the outstanding amount.
Gold loans are a convenient option for those needing immediate funds without selling their valuable gold assets.