By The use of gold as collateral for loans is a common practice in several countries in Asia and the Middle East. This concept, widely used across nations such as India, Turkey, and the United Arab Emirates, has been gaining considerable grounds in the West. With the rising popularity and potential advantages of the gold loan per gram amount, it’s high time to bring more clarity to this subject.
What is a Gold Loan Per Gram Amount?
A gold loan per gram amount refers to procuring a loan by pledging gold ornaments or coins as security. The loan amount primarily depends on the weight and purity of the gold. In this scheme, lenders provide a set amount of cash for every gram of gold pledged. They also determine the amount of loan to be given based on the gold rate for the day, which is usually 80% – 90% of the value of the gold.
Advantages of Gold Loan Per Gram Amount
There are numerous advantages linked to the gold loan per gram amount. Most significantly, the process is quick and straightforward, involving less paperwork than traditional loan programs. You can avail a gold loan within a day or two, with most lenders even offering to grant the loan within a couple of hours. This feature makes it an excellent alternative for those in need of immediate funds.
Eligibility and Flexibility
Unlike conventional borrowing systems, wherein the eligibility criteria might exclude several potential individuals, almost anyone can avail of a gold loan. As long as the applicant is above 18 years of age and owns gold in any form, they can avail a gold loan. This inclusive nature of the scheme also extends to those with a poor CIBIL score who can’t procure loans under conventional systems. Additionally, using an emi calculator app for gold loan can help applicants plan their repayments efficiently.
Flexible Repayment Options
Moreover, the repayment of a gold loan is more flexible compared to other forms of loans. Many lenders offer different repayment options to cater to diverse financial capabilities. One could opt for regular EMI payments or pay the principal and interest amount at the end of the loan tenure. However, one crucial detail to note is that unlike other assets, gold does not depreciate with time – it’s quite the opposite, in fact. Hence, there are fewer risks associated with availing a gold loan.
Sovereign Gold Bonds (SGB) as an Investment Option
Now, pivoting towards another gold-related financial tool – the Sovereign Gold Bond (SGB). If you’re wondering how to buy sovereign gold bond, you’re in for a treat. Much like the gold loan per gram amount, SGBs serve as profitable investment options too. They’re government securities denominated in grams of gold and provide an annual fixed rate interest to the investors.
How to Buy Sovereign Gold Bonds
Buying SGBs is a very systematic process. They’re issued by the Reserve Bank of India on behalf of the government, with periodic tranches opened for investors. To buy, you can apply through commercial banks, Stock Holding Corporation of India (SHCIL), designated post offices, or through the trading accounts of National Stock Exchange and Bombay Stock Exchange.
Benefits of Sovereign Gold Bonds
Among the benefits of opting for SGB is the added interest that comes along with the capital appreciation. Besides, SGBs are free from issues like making charges and purity in the case of gold in the form of jewellery. Lastly, SGBs are also exempted from Capital Gains Tax if held till maturity. That’s a triple advantage!
Conclusion
So, whether you’re looking at the gold loan per gram amount for immediate funds or trying to understand how to buy sovereign gold bonds for a longer-term investment, both offer numerous benefits. Both these means not only offer you a fair chance at enhancing your wealth but also come with a sense of security that gold is renowned for. Take your pick based on your financial requirements and preferences. Either way, you’re investing in gold, which is seldom a decision you will regret.
