Gold loan or sell your gold? What should you do when there’s cash required?


This is a very confusing question, and rightly so when one is thinking of getting money using their gold reserve. It is well known that when in need of quick money, gold comes to the rescue. That is the major advantage of gold as it provides such quick liquidity. But the dilemma remains whether to sell it or acquire a loan against it. There is a matter of trust when dealing with gold due to its volatile nature as well as the person with whom we deal. Whether you’ll get the right price if you sell or if the LTV is worth it. Further, when considering a loan, the gold loan scheme is a further cause of worry.

Both the options have their advantages and also their disadvantages. It depends on the situation that one finds themselves in when considering the two options at hand. Mostly a gold loan is the better option of the 2.

If you ask someone, many will say the gold loan scheme is a better option. On the other hand, many would disagree and say the gold loan interest rate is very high so sell your gold. To understand completely, we need to look at the whole picture of the gold loan scheme vs. selling your gold debate.

Is gold just any other ornamental metal?

In an Indian household, gold is not only a shiny metal with ornamental value. People are very attached sentimentally to their gold, which is often handed down generation wise. Hence most will shy away when it comes to selling gold.

A gold loan scheme is the best option when it comes to acquiring money using gold. Let us see why this is so.

  • The first and simplest reason is when you sell your gold you will not get back the charges you paid for making the ornament. In most of the scenarios, this fee is quite high and will lead to quite a big loss.
  • As mentioned gold has a sentimental value, especially if it is a family heirloom. It would take a significant period of time to buy back the gold you sell in most situations. If you sell an heirloom, you will never be able to recover it. Hence the option of selling gold should be the last one.
  • Gold loan interest rate may be high, but it is still far less when compared to traditional loans. Also, its approval time is far quicker than the normal loans. It is as easy as walking into an institution providing loans and coming out with the money. The documentation is very minimal.
  • The value of gold is constantly increasing. Hence it is quite a safe and secure form of investment. So if in need of urgent funds, go for a gold loan scheme. The value of gold will increase, which is a much better bargain than selling off early.
  • Gold loan repayment schedules are very flexible and are customizable according to your benefit. This is much better than going about worrying when it comes to selling gold and when you will be able to buy it back. When you submit your gold to a bank or NBFC for a loan, they guarantee to keep your valuables safe. Moreover, you are sure to get a very competitive interest rate. The loan value you get is also properly determined as per market value.

We have dissected why a gold loan is a better option than selling your gold when in need of money. But, if the consequences you face are very dire, then please rethink. If you don’t think you can repay a gold loan, then selling might be the better option. Also Getting a gold loan is a difficult and long process as compared to Cash for Gold which gives you the 99% of the actual value. If you possess gold in the form of coins or bonds, then it is a good idea to sell. There will be minimal losses. This is because the making charges are not involved here.

In general, it is mostly better to opt for a loan against the gold one has. This way, you get to keep your precious gold and get quick cash in hand for any emergency.

So go ahead and analyze your situation and your need and then decide upon the option that suits you best!

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