Gold Loan

When you are in a financial jam and need to find some cash urgently at a reasonable interest rate, a secured loan is definitely one of the best options. A secured loan is a borrowing instrument guaranteed by collateral such as property, gold, stocks and bonds, LIC policy, fixed deposit etc. When the collateral used at the time of taking a loan is gold, it is termed as a gold loan.

Gold loan is not a novel concept in India and providing money against gold ornaments pawned with the moneylender has existed in the unorganised sector since times immemorial. The key change in recent times has been the rapid expansion of the organised sector of gold loans.

Gold has always been regarded as the most desirable asset. It provides a good hedge against inflation. When the inflation is in existence and when other financial products like mutual funds, equity stocks etc, goes awry on account of them being more prone to risk in case of the falling markets, most of the people shift their preferences towards investing in gold. Gold is not sensitive to major swings and carries an inverse relationship against other financial products.