Take Loan Against Gold to Get Richer

Take Loan Against Gold to Get Richer

Gold Loan in India is the new type of loan which is now freely available in many Indian cities. Borrowing money against gold is not the new concept in India. It is the centuries old concept. However, up to now, this segment was highly unorganized. But now the various banks and financial institutes have entered in this sector in the organized form.

As the Gold price is rising day by day, smart investors and entrepreneurs have started taking a loan against their gold to finance their investments, businesses and assets.

Well, yes. It is true. The smart investors are now financing their assets by taking a gold loan. What I personally don’t like about the gold is its non-income producing capacity. Gold is the idle asset class means it doesn’t generate any cashflow/income for you. If you own Rs.1 crore of gold and Rs.1 crore of business than Rs.1 crore of business can give you annual Rs.10-20 lakhs of cashflow but the gold can’t give you any kind of cashflow.

This is the major limitation of gold as an asset class. But well, smart investors are right now taking a loan against their gold to finance their businesses and other cashflow assets. And you can also do the same thing.

The main advantage of taking a loan against gold is that, it has just 11-14% per annum interest rates while if you take a personal loan than you will have to pay 15-30% of annual interest depending on your credit history.

Thus, you can now take a loan against gold in India and use this money to acquire more assets. Well, let me tell you that never take a loan against gold for your personal expenses. You will ultimately loose the control over your gold if you default.

So be a smart investor and finance your assets by taking a gold loan.