Gold Loan
A gold loan is a type of secured loan where gold jewelry or ornaments are pledged as collateral to obtain funds from a lender.
Brief overview of Gold Loans (GL):
1. Collateral:
Gold jewelry or ornaments are used as collateral for obtaining a GL. The lender evaluates both the quality and quantity of the gold to ascertain the loan value.
2. Loan Amount:
The loan amount is typically a percentage of the gold’s market value, commonly ranging from 60% to 80% of the gold’s value.
The loan amount varies based on factors such as purity, weight, and prevailing market rates.
3. Interest Rate:
Gold loan interest rates are generally lower compared to unsecured loans like personal loans because the loan is secured by collateral.
The interest rates may be fixed or floating and vary among lenders.