Loans
Gold Loan
A secured loan against gold ornaments, where the metal is valued and held by the lender for the term. It is the fastest of the secured products because the security is present and assessable in the room, so the credit history of the borrower carries far less weight than it does elsewhere.
What you get
- Loan against gold ornaments, assessed on purity and net weight
- Valuation done in front of the customer before any amount is offered
- Credit history carries little weight, since the loan is secured on the metal
- Ornaments stored by the lender and insured for the term
- Interest only and bullet repayment structures where the lender offers them
- Ornaments released on full repayment, against the original receipt
FAQ
About gold loan
What happens to the gold if the loan is not repaid?
The lender is entitled to auction the pledged ornaments to recover what is owed, after the notices its policy and the regulations require. This is the real risk of the product and it should be said plainly at the counter, because customers often treat a gold loan as lower stakes than it is.
Is the whole value of the ornament lent?
No. Lending is against the assessed value of the gold content only, and stones, other metals and making charges are excluded. The proportion of that value which can be lent is capped by regulation, so an offer well above the usual band is a reason to look harder rather than to celebrate.