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What is Gold Overdraft Loan Facility: Risk And Benefits


You don't need always a good credit score to get a loan. If you have gold with you, you can get a loan easily and spend as per your requirements. Using your gold for the loan purpose you can get easily a decent amount in your account for your spending needs. But how and where?


There are two ways you can get a loan credit over the gold. These are the Gold Loan Overdraft facility and Gold Loan EMI option. Using anyone, you can satisfy the various needs of life and fulfill your pending works with the loan amount. Which one you should select is determined by your financial needs.

However, the Gold overdraft facility might be a good option because it works similar to credit cards. A Credit Card is a widely used credit facility by consumers for spendings. In a Gold Overdraft loan is the amount you get is equal to your gold loan amount and it functions similar to using a credit card.

When you deposit gold as collateral with your lender, they create an overdraft account to which the loan amount equal to the value of the gold pledged is credited. Another option is to use cheques that are issued separately for the overdraft account to access the loan amount. In the case of an overdraft, the interest rates are significantly greater than typical. In addition, unlike a gold loan with an EMI option, an overdraftfacility payment option is a lump sum payment that may be stopped at any moment.



  • With the Gold Overdraft Loan facility you may spend as much as you want, whenever and anywhere you want, as long as your credit limit is not exceeded.
  • Utilize the funds any time and anywhere.
  • You may shop online, transfer payments, and pay bills directly from the loan amount,
  • Use Gold loan with ATM card, mobile banking, and internet banking.
  • With an overdraft, you simply have to pay interest on the amount borrowed.
  • During the loan period, release/replace gold ornaments.
  • Alternate locker facility with complimentary gold ornament insurance.
  • Instant approval and simple processing.
  • Paperwork is minimal, and funds are disbursed quickly.
  • The loan will be secured by the pledge of 22 kt gold jewelry.
  • Rates per gram are higher.


  • Inflation, global gold price changes, government gold procurement, and demand-supply mismatch in the jewelry industry are all factors that have an indirect or direct impact on gold loan interest rates.
  • Gold loans are often used for short- to medium-term financing. Ensure that you repay it within the set time range and that your gold is returned to your treasury.
  • Understand the valuation methods adopted by the lenders. Remember, none of the lenders will provide the entire value of your gold as a loan. It is necessary to note that the amount of money obtained from gold loans varies in different banks based on the margin amount.
  • Make thorough inquiries before deciding on a gold loan lender! The repayment regulations and structure differ from one lender to the next.
  • Consider the fact that gold loans have higher interest rates than educational and residential loans. As a result, you should compare the interest rates offered by various banks. A high rate of interest could disturb your financial balance.


This facility is designed to help those who need short-term emergency loans without having to make a large new commitment. Furthermore, because this credit is granted on top of an existing loan, customers do not need to provide any new documentation.

Although the credit card eligibility requirements appear to be straightforward at first look, those who are unable to match any of them may be unable to use this product. Even those who qualify will have to deal with additional restrictions for a personal loan secured by a credit card. In that case, a Gold Overdraft loan facility could help fulfill your needs without hassle.

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