Gold loan requires very minimal documentation, so the processing time taken by banks or other financial institution is very small. Normally it will be sanctioned in one or two hours. Some banks even offer to give loans in a very few minutes. Normally only document you may require is an address proof
The interest rates charged for gold loan is lower when compared to personal loans (around 5-8% cheaper). So it is better to use your asset to work for reducing the interest rate burden.
Unlike loans such as housing loan, car loan or agricultural loans there is no usage restrictions for the amount you borrow using a gold loan. You can use it for any of your needs.
Most families in India have an emotional attachment to gold . So this might make you morally responsible to repay the loan, so that you can get back the gold pledged for loan.
Keeping gold in houses comes with a risk as thieves are always on a lookout to steal gold. If the gold is pledged for a loan, it will act as a secure locker for you. The bank will be insuring their lockers which they are keeping the gold. So you are sure that you will not loose the value of your gold asset kept as collateral.
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Regards,
Jerith Shajan
