Gold Loan or Selling Jewellery? What Works Best in a Cash Crunch
Gold continues to be one of the most trusted investments for Indian households, especially during financial emergencies. When urgent cash is needed, many are faced with a key choice, take a gold loan or sell gold jewellery.
Gold Loan Option
Banks and NBFCs offer loans against gold deposits, usually accepting jewellery, coins, or biscuits with 18K to 24K purity. Borrowers can avail loans of up to 75 percent of the current market value of gold. Once the loan is fully repaid, the pledged gold is returned, allowing owners to retain long-term value.
Selling Gold for Immediate Cash
Selling gold in the open market is often quicker and simpler. Jewellery can be sold to any jeweller, including the original seller, making it a preferred option when instant liquidity is required.
Which Is the Better Choice?
- If gold prices are expected to rise, a gold loan is advisable, as ownership is retained and the asset may appreciate.
- If prices are likely to fall, selling gold may be wiser, with the option to repurchase later at a lower rate.
Bottom Line
The decision depends on market trends and personal financial needs. Gold loans help preserve ownership, while selling gold offers faster access to cash.
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