Indians tended to invest in gold as it is an integral element of their culture and numerous religious celebrations, but because of its value in the financial market. In an emergency, you could sell gold and get the cash. In the modern age, selling gold in exchange for funds is unnecessary since there’s a way to obtain an immediate loan by pledging the gold to an NBFC or a bank. Liquating gold and taking out the gold loan has distinct advantages and drawbacks. Find out more about each.
What is an Instant Gold Loan?
The gold loan is a type of credit you get by pledging the physical value of gold to secure. The amount you can receive in a loan for gold is based on the current market value for the precious metal. Most lenders will offer 70-75 percent of the importance of gold as the loan amount. Instant gold loans are more affordable than personal loans since you can use the gold for collateral. You can keep your possessions after you pay the loan in total, and you do not need to dispose of the assets.
The banks and NBFCs can also provide instant gold loans accessed online. The loans are typically disbursed in 24 hours or less, aiding in times of urgent need. The authorized representatives can approve the loan right at your door. There is no need to go through the hassle of visiting the branch in person, and you won’t lose your possessions either.
Before applying for a gold-based loan immediately, you should assess your EMI using your gold loans EMI calculator.
Eligibility Criteria For A Gold Loan
- For lenders to grant gold-based loans in exchange for gold jewelry, the purity has to be 18K to 24K. 24K represents the most pure version and contains 99.99 percent pure gold.
- You must be at least 18 years old to be eligible for the loan.
- You must own the gold assets for the loan to be authorized by your name
Getting An Instant Gold Loan Versus Selling – A Comparison
Let’s now look at instant gold loans selling according to different parameters to determine which is best for you.
It is only necessary to pledge your gold collateral to obtain money. After you pay the amount due, you’ll receive the gold back. This is highly beneficial as you still hold the title to your asset, and it could grow shortly. However, when you decide to sell gold, you must sell your ownership in exchange for money.
Secure and Safe
Your precious metals will be secure since the lender keeps them in vaults with high security. Your assets’ safety is guaranteed by the fact that they keep your gold in the vault of the bank. To ensure the gold you own is secure, Some lenders will cover them with insurance. This is an advantage of obtaining an immediate gold loan.
Access to Funds Is Easy
Many lenders provide online ways of requesting a loan in gold. This can speed up the process. It is not necessary to travel physically to make an application for a loan. The loan amount is paid out quickly because these loans are secured. You can access funds within the next day, depending on the loaner. Selling gold can take a long time. Finding an experienced jeweler who can give you an acceptable price is necessary. It is a long process, and determining the purity of gold can be difficult. It may be required to present the gold certificate you received when purchasing. This is because, without this document, sellers might not buy the gold. In other words, they might not offer you money or provide you with gold of equal worth in exchange.
Processes that are involved
A gold-based loan that is instant requires the least amount of documentation. All you need to do is submit the essential KYC documents such as a PAN card, Aadhaar card, passport, Voter ID, and more. Selling gold can be a hassle and requires you to find the buyer, confirm the purity of the gold, and get the correct price.
The Jeweller’s Selling Price Is Always Higher Than Their Buying Price
Jewelers assess the quality of gold based on the current buying rate on the market. The selling price for jewelers is always higher than the purchase price. If you purchase gold jewelry, you must pay taxes and charges. However, if you sell it to a jeweler, you won’t get it back and will also be responsible for the cost of the spread imposed by the jeweler. Therefore, physical gold isn’t as simple to sell as it is to purchase.
The sale of gold on the market could result in an investment gain. This can be tax-exempt for capital gains that will lower the amount you get from your gold loan.
Extra Lines of Credit
You may get an additional credit line by taking out a gold credit. This means that you will be able to draw your loan money at any time. Only pay the interest on the amount you used.
So, Is It Better To Sell Gold or Get An Instant Gold Loan?
The option of liquidating gold and taking out immediate loans in gold may assist you with money to meet your immediate needs in the financial market. Your choice is contingent on the circumstances and your ability to repay. You could take out the option of a cash loan for gold when you believe that gold’s price will increase soon since you can keep a high loan ratio to value and concentrate on timely payments. Gold’s value is significantly higher after a repayment than it was before. However, If you believe the price of gold will fall, it’s best to sell it since you can purchase it at a lower price later on. If you’re uncertain about what might occur to the cost of gold, it is possible to decide on your ability to repay. If you’re confident you can pay back this gold-related loan EMI comfortably, you can take out the gold loan. Or, you can sell the gold to earn the money, thus easing the obligation to repay the loan. However, it would be best to remember that the gold loan has advantages over the gold of sale because you’ll still own it. It is always advantageous to own a valuable asset like gold. No matter what, you should look at every angle when buying.