Making Use Of The Rising Gold Prices Through Loans

For every person, there comes a point in life, when there is an urgent need of cash for some important purpose. If it seems to be a small sum, you can ask your friends or family members to lend some money. However, if the amount is large, it might be a struggle for you to find someone who is willing to lend such a large amount. Now that the picture seems clear to you, there are two options you can take. You can either approach a bank to apply for a personal loan or you can look for a gold loan against some gold kept in your home safety locker.

When it comes to personal loans, they are unsecured in nature which is borrowed for purposes like buying consumer durables, family vacation, marriage etc. It depends a lot on the credit worthiness of the borrower. The interest rates here usually fall under the range of 13-15% in most cases. Considering these aspects, gold loans prove to be a much better option.

The precious yellow metal has become a part of everyday life in India. People are now looking at gold as an investment and the reason for this is the rising gold prices. However, gold can also turn into an unproductive and dead investment if not looked properly. If it is lying in a safe in the locker of some back, it is as close to being a dead investment. But if you are ready to use it in times of need and monetize this dead asset, which is when gold becomes a much more useful asset.

 Personal loans, being unsecured, banks sanction them only to those who have a good credit history to their name. This is because the banks are not sure that the borrower is credit-worthy or has the potential to repay the loan on time.

Under such circumstances, gold loans might prove to be the only option. For its approval, the credit history of a person is never a concern because of the fact that gold loans are secure. Also, taking into account all kinds of loans available today, such loans are the fastest to obtain. Since it’s a secured loan, the banks are not worried about the ability of the borrower to repay the money. This also means that there would be lower rate of interest.

Considering the ever increasing gold prices, the banks are getting more and more attracted by the borrowers. If you happen to not repay the loan in time, the bank after waiting for a specified time period, automatically auctions off the gold. This way, they not only get their principal amount and interest back but also make a good profit in the deal.

So, the next time you feel the need for money for any person, all you need to do is visit the nearest bank or financial institution with enough gold to cover the loan you desire. 

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