What is Gold Loan?



A gold loan is a type of secured loan where the borrower pledges their gold ornaments or jewelry as collateral to the lender in exchange for a loan. The amount of the loan is typically a percentage of the market value of the gold pledged. 


Gold loans are popular in many parts of the world, particularly in India, where gold is a common form of savings and investment. The process of getting a gold loan is typically faster and easier than other types of loans, as the gold serves as collateral, and the borrower's credit score is usually not taken into account.



The interest rates on gold loans are generally lower than other types of loans, and the repayment period is typically shorter. If the borrower fails to repay the loan, the lender has the right to sell the gold to recover the outstanding amount.


Gold loans are considered to be a good option for people who need quick access to funds but may not have a good credit score or other forms of collateral. However, it is important to carefully consider the terms and conditions of the loan and ensure that you can repay it within the given timeframe to avoid losing your gold.