Debunking Common Gold Loan Myths

Gold has been a cherished asset in India for centuries, symbolising wealth and security. Many individuals accumulate gold in the form of jewellery, coins, or bars, and often consider leveraging it for financial needs through gold loans. However, misconceptions about gold loans can create hesitation. Let’s debunk some common myths to help you understand the true benefits of gold loans.

6 Myths About Gold Loans Debunked

If you are considering a gold loan, it’s crucial to differentiate between fact and fiction. Here are six prevalent myths along with the truths behind them:

1. My pledged gold could be lost or stolen!

Many people worry about the safety of their pledged gold. In reality, reputable lenders implement stringent security measures to protect your assets. When you choose a RBI-approved financial institution, your gold is stored in secure vaults and insured against theft or damage. Additionally, many lenders offer doorstep services where trained representatives appraise your gold on-site.

2. Gold loans come with exorbitant interest rates!

A common misconception is that gold loans have high-interest rates. In fact, gold loans typically offer lower interest rates compared to unsecured loans because they are secured by the value of the gold itself. Interest rates can vary based on factors like your credit score and the lender you choose; for example, at Bajaj Markets, you can get gold loans at competitive rates starting at just 8.88%.

3. Only jewellers provide gold loans!

While some may believe that only jewellers can issue gold loans, this is no longer the case. Banks and Non-banking Financial Companies (NBFCs) also offer secure and reliable gold loan options. The rise of digital platforms has made it easier than ever to apply for a loan from the comfort of your home.

4. If gold prices drop, my repayment amount will increase!

This myth creates unnecessary anxiety among potential borrowers. The truth is that gold loans are secured by the quality of the gold, not its market value at the time of repayment. Once your loan is approved based on the Loan-to-Value (LTV) ratio, your repayment amount remains fixed, regardless of market fluctuations.

5. Applying for a gold loan is a lengthy process!

Many people shy away from applying for a gold loan due to concerns about a complicated application process. In reality, obtaining a gold loan is often quick and straightforward. Most lenders require minimal documentation—such as ID and address proof—and many offer 100% online applications with rapid disbursement after verification.

6. Only specific types of jewellery qualify for a loan!

Some believe that only certain types or styles of jewellery can be pledged for loans. However, as long as the gold meets purity requirements (between 18k and 24k), it can be used as collateral—regardless of its age or design.

Conclusion: Empower Yourself with Knowledge

With these myths debunked, you can consider a gold loan, a viable financial solution for urgent needs—be it education expenses, weddings, or other significant costs. If you're ready to explore this option further, visit Bajaj Markets to apply for a gold loan. Enjoy benefits like part-release facilities and doorstep services that make securing a loan seamless.