The increase in demand for gold jewellery and other ornaments has pushed gold prices. Indian households own a significant amount of gold, and most of it is lying idle. There are multiple ways to leverage gold items for financial advantages. When it comes to using gold for financial gains, most people are confused about the right approach. Primarily, there are two ways to use gold for obtaining funds. This includes gold loans and the sale of gold items. The former entails getting a loan by pledging gold articles. There is no transfer of ownership. However, in the case of a sale, the ownership is transferred to the buyer. Read on to understand more about both in detail.
What is a gold loan?
Gold loans can be explained as secured loans offered against a gold article of value. The amount provided as a loan is contingent on the value of the gold article pledged. An increase in market value can help you obtain a higher loan amount. However, you must be mindful of the gold loan interest rate charged by lenders on account of the loan. A higher interest rate can add to your financial burdens. A gold loan from reliable financial institutions like Muthoot Gold Point will help you get the best rate and offer the correct value for the pledged gold articles.
What does gold-selling entail?
Selling gold is another way to leverage gold belongings for financial gains. It involves a transfer of ownership of gold articles. There are plenty of financial institutions and gold-selling companies that accept gold from people and offer money based on the value of gold. However, there are certain requirements listed by companies offering cash for gold that needs to be followed. In most cases, proof of ownership of the gold article being sold is required. Let’s take a quick dive into the key steps to be followed for selling gold articles.
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Present the proof of ownership
All reputed gold buying companies will ask you to submit the proof of ownership (usually the purchase receipts) before starting. The evidence of ownership also has details of the purity and weight of the gold article.
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Assessing purity and value
The second step in this process is assessing the purity of gold in Karats. The value is determined based on the purity and weight of gold you are selling. In addition to the purity, current market prices are also factored in computing the value. A final price will be shared based on this calculation. If you are satisfied with this price, you can choose to sell gold articles and get the money.
Which is better?
You can obtain funds by pledging gold articles by either selling them or getting a gold loan. Both these processes are suitable in different situations. If you don’t want to transfer the ownership of the article, it is recommended to get a gold loan. However, selling is recommended if you don’t mind the transfer of ownership and want to get rid of the gold item. If the gold interest rates are too high, you can choose to sell gold items. Alternatively, it makes more sense to obtain a gold loan in case of low interest rates.
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