Manage your temporary cash crunch with gold loans: All you need to know

Here are the pointers on how to manage your temporary cash crunch with gold loans:
  • Gold loans can rescue you during a temporary cash crunch. Many banks and non-banking financial companies (NBFCs) claim that a borrower can walk out with cash within 30 minutes 
  • Almost all forms of gold can be pledged, including jewellery and ornaments. A borrower can get maximum 75 per cent of the gold’s value as loan
  • A gold loan offers flexible repayment option. You can either pay only interest in equated monthly instalments (EMIs) and principal at the end of the tenure (bullet repayment), or opt for a regular structure - where both interest and principal are charged monthly
  • If you fail to pay by the due date, the lender may slap a 2-3 per cent annual penalty. If you skip more than three payments, it can sell your gold to recover its dues after a grace period of 90 days
  • Watch out for charges other than processing fee and interest rate. Some lenders also charge 0.25 per cent for valuation and custodial charges