Gold has always had an emotional value for Indians. Taking personal loans against gold has not been considered a ‘right option’ by many but keeping in mind the rising value of gold, it actually makes sense to utilize its power to avail loans than pay for high interest rates for personal or other loans.
So what is gold loan? It is basically a loan which is secured against gold ornaments. A borrower pledges their gold ornaments to the lender in exchange for funds. Therefore, it is a loan which is granted against a certain physical security of gold. Once you repay the loan, you take your gold back. The interest rate is much lower than a pure personal loan as there is a security being provided by the borrower. The processing time for personal loans against gold is also quite less as compared to other loans.