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With the festive season around the corner, there has been a consistent spike in demand for gold loans from tier-II and tier-III cities, as per a report.
The recent geopolitical developments have also resulted in gold prices moving northward. This has resulted in making gold loans a more attractive option by raising eligibility.
The price of gold is Rs 5,625 per gram for 22-karat gold and Rs 6,136 per gram for 24-karat gold, which is also known as 999 gold.
An individual can avail of a gold loan, which is a secured form of loan, from banks and non-banking financial companies (NBFCs). With faster processing and flexible repayment options, gold loans are ideal for addressing any financial need in business or any emergency in the family.
This financial need could be related to fuelling growth in business or for a startup that may need to address any credit crunch to meet additional demand requirements in the market.
Also, it could be related to financial needs for weddings or health concerns in a family. It may also be useful in meeting the financial need for a long-planned vacation or addressing any shortfall in the margin money for auto or home loans.
Although gold loans are associated with financial freedom, it is important for an individual to opt for one with due diligence when it comes to understanding the terms and conditions.
A repayment plan should be suitably worked out prior to going in for such a loan. There is a likelihood of interest rates varying from lender to lender, so it is advisable to suitably compare them before going ahead with a gold loan.
While offering a time-tested, reliable, and accessible avenue for maximising financial flexibility, an individual should opt for a gold loan with an aim towards responsible borrowing.
With a focused approach, gold loans provide the way forward to address any form of financial challenges and create a path for sustainable financial growth.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.
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