By Ranga Life has a certain way of throwing us curveballs when we least expect them, and they tend to come in the form of unplanned expenses, whether it be for personal expenses like urgent healthcare, unexpected travel or even happier expenses like weddings. Whatever the reason might be, they came out unexpectedly and unplanned for, and your bank account is not entirely up to the task.
So in such times, you might need to take out a loan. For most Indian households, the most popular type of loan is a gold loan. Why is that? And what exactly is a gold loan? Let’s get into it.
Introduction To Gold Loans:
A gold loan is a type of loan that is taken out against a borrower’s gold assets, whether it be jewellery, coins or bars. The gold in question typically is required to be between 17 and 22 karats in value, and the size of the loan will depend on the value and purity of the gold. Most financial institutions will offer around 75% percent of the aggregate market value over a certain period of time, typically around a month or so.
Part of the reason gold loans are so popular is that, due to the universal value of gold, it is a very easy asset to liquidate, and so loans taken against it have very quick disbursal times. And in most cases, you can get the funds in question on the same day the gold is handed over.
Another reason is the attractive interest rates on such loans. Since the loan being secured against gold comes with different interest rates from alternative loan types, to find out more about the matter, simply look up ‘interest on gold loan’, and you will find more detailed and more specific information.
There are also several apps, such as the gold loan app, that allow their users to at least initiate the process from the comfort of their homes. However, that being said, some institutions may require in-person verification, and obviously, the gold does need to be handed over in person. But these apps do allow you to begin the application and to pay interest with just your phone.
Some of these apps even offer a calculator that lets you input information like the size of the loan, the length of the tenure, the value of the gold, etc., and provide estimates on EMIs and interest rates. To find such an app, one needs only look up something along the lines of ‘calculate gold loan’ to find a slew of such apps.
Conclusion:
At the end of the day, a gold loan is not something people plan for; it is something they turn to when the situation calls for it. Understanding your repayment plan, keeping track of interest, and using tools available to you can make the experience far more manageable. If it is with that clarity, a gold loan does what it is meant to do: it helps you deal with finances without making the future harder than it needs to be.