Indians constantly strive to establish better lives for themselves and their loved ones. In a country where aspirations continue to rise, loans have become crucial financial tools that enable individuals to fulfil their dreams. Loans can help you finance your child’s education, start a business, buy or renovate your home, and upgrade your car. While most people opt for personal loans in times of need, gold loans are slowly becoming more popular. Let’s explore how these loans work and how they benefit you.

What Is a Gold Loan?

A gold loan is a secured loan where you pledge your gold ornaments and coins in exchange for funds. Lenders usually offer a percentage of the market value of the gold provided as collateral as the loan amount. Most lenders offer 75% of the value. The pledged gold is kept safely in a vault until the loan is repaid. Many prefer gold loans since they can quickly access necessary funds without selling their gold assets.

What Are the Benefits of a Gold Loan?

Immediate Capital

One of the primary benefits of a gold loan is the ability to access immediate capital. Lenders often disburse the funds within a few hours since they can secure the loan with your gold assets. The minimal turnaround time makes gold loans an excellent option for emergencies.

Better Interest Options

Since gold loans are secured loans, you generally enjoy lower interest rates. Lenders offer favourable rates, especially when compared to unsecured personal loans and other secured loans.

Freedom to Use the Funds Without Restrictions

When you apply for a home loan or car loan, the lender puts several restrictions on how you can use the disbursed funds. There are no limitations with gold loans. You can use the money to pay for medical treatment, business expansion, home repairs, or a wedding or vacation.

Quick Liquidity Without Loss

Most of us let our gold assets lie idle in our bank lockers or home safes. With a gold loan, you can quickly access funds up to 75% the value of the gold without losing the asset. You can meet your financial requirements and then take your gold back once you repay the loan entirely.

How to Apply for a Gold Loan

The process of applying for a gold loan is generally straightforward. The steps include:

Finding the Right Lender

Research your options and identify a lender who offers gold loans. Consider factors like the loan terms, customer service ratings and interest rates. Find the best lender based on your location and needs.

Getting the Gold Valued

You will have to visit the lender and let them value the gold assets. You may have to provide a few documents during the process.

Loan Approval

The lender will let you know the market value of your gold and the loan amount they can offer. They will provide a formal offer that includes interest rates, loan tenure and repayment terms.

Loan Disbursal

Once you agree to the loan terms and surrender the gold, the lender will disburse the amount.

Gold loans are an efficient and reliable way to access funds when you need them most. As a trusted lender, HDB offers gold loans with competitive interest rates and flexible repayment tenures. Additionally, we ensure the safety and security of your gold assets and return them to you safely on loan repayment. Visit the HDB website today to start the online application process and make the most of your gold.