Gold Loans

                                                                                             

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Gold Loans are a new type of Loan offered by few Banks and Financial Institutions to assist customers who are in need of money and have no other asset but Gold.

It is a risky place to enter for Banks and Financial Institutions as the asset value of Gold may increase or decrease depending on the market conditions and the loan amount provided to customer's may or may not be sufficient. For eg: if the loan amount provided to the customer based on his gold value as per the current market price is Rs 1,00,000 and later if the market value of the asset or Gold falls below Rs 1,00,000 Bank or the Financial Institution will face a loss incase the customer defaults on the payment and gold had to be sold to recover the outstanding.

Further, Gold Loans are very lucrative and offered in major cities of India as people in this part of the world prefers buying gold as an asset and will use it when ever required. Incase of emergency this asset or gold will be mortgaged with the Bank or Financial Institution and if the amount is repaid within the stipulated period the individual gets back his Gold deposit.

Gold can also help you in times of need and is sometimes considered as Safe Heaven. Gold also known as the Yellow metal reached its peak in the year 2012 and after that remained at a constant level. Gold loans are helpful to poor farmers and middle class people who are in urgent needs of funds and get their gold back once the amount of loan is repaid along with the interest charged by Banks and Financial Institutions.