Emergency Cash: Should You Sell or Pledge Your Gold?
Gold has always been considered a safe investment in India, especially during financial crises. When facing urgent financial needs, individuals often wonder whether to sell their gold jewellery or take a gold loan.
Gold Loan
Banks and NBFCs offer loans against gold deposits. If the loan is repaid, the gold can be reclaimed. Typically, gold items like coins, biscuits, and jewellery with 18K to 24K purity are eligible.
Most banks provide loans up to 75% of the current market value. For example, if the gold’s value is Rs. 2 lakh, a loan of up to Rs. 1.5 lakh can be availed.
Selling Gold in the Market
Selling gold directly is often easier than pawning when immediate cash is needed. Gold can be sold to any jeweller, including the one from whom the ornament was purchased.
Which Option is Better?
- If gold prices are expected to rise, taking a gold loan is preferable. This allows you to repay the loan while retaining your gold, whose value may increase over time.
- If prices are expected to fall, selling gold is better. You can buy it back later at a lower price when your finances stabilize.
Choosing between selling gold or taking a gold loan depends on market trends and financial needs. Gold loans preserve ownership, while selling provides immediate liquidity.
