Home / Money / Personal Finance /  Gold loan can help you in these situations this festive season

In any financial emergency, gold can help you. Banks and NBFCs grant loans on gold. A gold loan is a secured form of loan that a lender offers. Borrowers keep their gold ranging from 18 carats to 24 carats with the lender for availing capital. Gold loans usually have faster processing and flexible repayment options.

Let us look at some of the purposes for which Gold loans make perfect sense. Rajesh Shet, CoFounder and CEO of SahiBandhu has listed some emergency situations where a gold loan can help you this festive season.

1) Business Requirements: In order to fulfill sales orders during the holiday season, there has been a significant demand from small businesses and start-ups for additional funding. A gold loan appears to be the ideal way to get money quickly, with less paperwork, flexible repayment terms, and interest rates that are lower than those of other loans.

2) Weddings: The festive season is the ideal time to begin preparations for Indian weddings. There might be a sudden need for money with the upcoming wedding season. This is where gold loans are useful. A family wedding frequently entails significant financial outlays for which one can opt for a gold loan. This form of borrowing saves time from the lengthy procedure since all you need are KYC documents to avail this.

3) Health: With festivities, comes lots of happiness and joy. However, there are unfortunate incidents that one would never expect and be prepared for. A report states that between 2016 and 2020, three days before and after Diwali, 195 patients with burn injuries visited the emergency department, of which 54.3% (106) involved firecracker-related burn injuries. The average age of the cases was under 19 in 46.2% of them. Gold loans may be useful in such cases of emergency to meet these expenses.

4) Travel: Festivities present an opportunity to escape from routine life and make travel plans that could cost a fortune. Now is the ideal time to take that long-planned vacation because gold loans can be acquired with no specific purpose and can be used as needed. It accomplishes the goal of covering expenses like travel and lodging at any location in India or abroad.

5) Buying an asset: Sometimes gold loan is used when there is a shortfall in the margin money for vehicle and home loans. You could take a loan secured by your gold rather than using your credit card or applying for a personal loan with a high-interest rate. Gold loans have much lower interest rates.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint.

 

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