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Loan Against Gold- Select The Bank

About Loan Against Gold

One of the age old ways to get loan is against gold or gold ornaments as security. Most of the banks today offer this facility. This type of loan is most beneficial for those who need loan for a short duration of time as the interest rates for this loan is much lower than the other loans. Along with the liquidity of gold you can also be assured of the safety of the gold jewellery that you put up as security.

Most people are not aware of the fact that applying for a loan against gold is cheaper than applying for a personal loan. If you have a demat account then you will need a trading account to purchase gold ETF which can be used to get loan against gold ETF. The loan against gold interest rates is lower than the personal loans. Loan against gold rates are affordable if you can pay off the interest along with the principal in one lump sum payment.

If you have gold ornaments or gold bars or gold ETF then you can get loan against gold from a bank. The loan against gold ETF does not exceed more than 75% of the gold ETF value. One can get cheaper loan against gold interest rates if the amount borrowed is about 50% – 60% of the market value of the jewellery offered. The loan against gold rates varies depending upon the margin of the borrower leaves for the lender.

In most cases you do not need a credit history with the bank to get loan against gold. Loan against gold can be used to get demand loans as well as overdraft facility from the bank. In general the loan against gold interest rates varies in the range of 10% to 17%. This means that if you can offer more jewellery for the same amount of loan you will be offered lower loan against gold rates. Any applicant can get loan against gold ETF who has a gold ETF certificate. There are some banks which do not give loan against gold ETF but offer overdraft facility on them.

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