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People find more advantages than disadvantages of gold loans


As you might know, many people are having gold loans nowadays and it is growing faster than any other loan. But why is that? What makes a gold loan different from other loans? We know well that banks and NBFCs have started to provide gold loans to people and encourage them to take them. People are also choosing gold loans more than any other loans despite having some disadvantages.

Yes, you heard it right I said disadvantages but very few. You can not deny that everything has its pros and cons but we should choose things with the majority of the benefits. Just like that, a gold loan has its advantages and disadvantages. But despite having some disadvantages, people are choosing it because of its great benefits that are very helpful nowadays. Let’s start learning about its advantages and disadvantages so that we will know what makes it more convenient.

Advantages of a Gold Loan

Very convenient

Most of the households in India have enough gold like ornaments of gold or utensils of gold. So, it is very convenient to borrow a loan against your gold. The rate of the gold loan per gram varies from time to time. As people have it already as a reserve in their home for an emergency this becomes the best option for them. You can not argue about the reason behind it because now you know it is very convenient. You already have it and it is a good solution for all your problems relating to your financial situation. Then, why shouldn’t people go for it?

Affordable low-interest rates

It provides you with a very good and low affordable gold loan interest rate. Any lender who will give you money against your gold is secured in nature for that lender. So, it becomes easy to have trust in you and that’s why they can give you affordable interest rates. 

Very quick loan distribution

The process is very quick in this as it doesn’t require many documents like your income documents or CIBIL score documents. All you need is to provide the lender with your Id proof ( adhar card, pan card, voter id, etc.) and address proof if it is not in your Id proof card. Some non-banking financial companies get things done within an hour. 

Processing fees

When it comes to gold loans the fees of the process are very low compared to other loan procedures. Because there is no requirement of much paperwork so they charge a decent fee for it. But if you go for other loans there is a lot of paperwork because of that you need to pay a lot of fees for it. Afterward, it becomes a headache for customers.

No requirement of credit history

There is no requirement for your credit history. They collect gold from you as collateral already. This is why there is no need for your credit history. Your Gold is there for them to trust you enough. But if you go for a personal loan you need to provide them with your credit history because they do not have anything of yours against their money.

Disadvantages of gold loans

We have talked about the advantages enough. Now it’s time to talk about the disadvantages of gold loans.


The loan to value ratio is different from lender to lender. It can go up to a maximum of 80% of the value of your gold. Your loan amount is decided based on the loan to value ratio.

Losing gold due to loan default

In case you are not able to repay somehow, you will lose your gold. The company or the bank has all legal rights to freeze your gold. If they want they can auction it too for a good loan amount.


As I have already mentioned in the very beginning that gold loans have more advantages than disadvantages. Now I think everything is clear about why people go for gold loans nowadays.

However, there are very few disadvantages which can be avoided if we take action carefully. Also, these disadvantages are nothing compared to the benefits we can get. So now I will suggest you go for gold loans.

You have read about the benefits it can give you to solve your problem right now. I recommend you to visit the website of Rupeek Gold Loans. The company is very trusted for its facilities and great schemes. The procedure is also very easy. You can apply for it online also with only four steps.

They also provide you affordable low gold loan interest rates with a calculator to check and flexible repayment options. I hope this will be helpful for you.