Did you know that there was a time when a country’s currency was valued based on the gold reserves it had? It was known as the gold standard, a traditional system for valuing currency where paper money was converted into a fixed amount of gold. The importance of gold has always been high and continues to be so. It is counted among the most liquid assets that anyone can invest in. Most people resort to their gold reserves during a state of financial emergency. It can help you meet urgent financial obligations. There are two ways to use gold reserves to obtain money. The first one involves a direct sale of the gold, and the second requires taking a gold loan. Read on to learn more about these two in detail.
Gold Loans vs Selling Gold
A gold loan can be explained as a secured loan that allows borrowers to obtain funds by pledging their gold reserve as collateral. Most reliable gold loan institutions like Muthoot accept gold ranging from 18Karats to 24Karats. One of the most important considerations for taking a gold loan is the interest rate. The Muthoot gold loan interest rate is among the most competitive ones that you will find. The total amount of loan borrowers can opt for varies based on the value of gold deposited. Most banks offer 60% to 65% of the gold’s value as a loan. However, in some cases, this can go up to 75%.
Selling gold simply refers to the act of selling the gold articles you own at a jewellery shop to obtain funds. You can sell different types of gold articles, including bars, coins, jewellery, etc. Before selling the gold, it is highly recommended to conduct the essential due diligence regarding the current price of gold, quality of gold articles owned, best prices, the reputation of the reseller or jewellery shop, etc. Following these best practices will help you find the best price for your gold. Some critical things to be mindful of while selling your gold include the following.
- Learning about the purity of the gold is important to know what it’s worth. The purity of gold articles is measured in Karate. Therefore, a higher Karate will convert into a higher selling price for the gold.
- You must keep the original bill or invoice of the gold article’s purchase. It will certainly help to obtain the best price.
- The current price of the gold must be kept in mind while selling a gold article.
Which is better?
There are multiple factors to consider when it comes to selling gold vs getting a gold loan. In most cases, taking a gold loan is ideal as you don’t have to transfer the ownership of the gold article. You can simply repay the loan amount and get the ownership back. On the other hand, selling gold will require a transfer of ownership, and there’s no option to buy back the possessions. Reliable gold loan providers like Muthoot Fincorp can help you get the best LTV for the gold you offer. In addition to this, the Muthoot gold loan interest rate is quite affordable, and you can also choose a flexible repayment term.
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