Financial Instruments Against Which You Can Take a Loan

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Take a Loan

One of the main reasons why people invest is to get financial assistance during times of need. Sometimes, these contribute greatly in fulfilling our short-term goals. Apart from personal loans there are a number of other financial instruments too which can be used to meet your financial emergency. For example, if you have a fair amount of gold at your disposal, gold loans help you accumulate a good sum of liquid cash during contingency situations. Let us look at the gold loan interest rates along with the interest rates of other financial instruments.

Instrument Loan To Value Interest Rate
Gold 75% 12-17%
Life Insurance Policy 85-90% 9-10%
Fixed Deposit 90% 2-2.5%
Real Estate 75% 11-15%
Shares 50% 11-16%
  • Loans against Gold– Gold loans can be taken against physical loan. As per RBI, the loan to value rises to maximum of 75% which means that if the value of your gold is Rs.100, you are eligible for a loan of Rs.75. The gold loan interest rate lies between 12-17%. So, instead of taking a personal loan, you can take a gold loan during times of financial need.
  • Loans against Life Insurance Policy – If you have a life insurance policy, you can take a loan against your LIC – 85-90% of your surrender value. The interest rate lies between 9-10%.
  • Loans against Fixed Deposits – The minimum tenure of your fixed deposit lets you take a loan against your fixed deposit. You can avail a loan of up to 90% of your fixed deposits, for which you are charged an interest rate of 2-2.5% higher than interest paid on deposits by banks.
  • Loans against real estate – If you own a real estate property, you can use it to get a loan. Avail a loan of up to 75% of the value of your property. The maximum tenure of a loan against real estate property usually goes up to 15 years, and the interest rates ranges between 11 and 16%.
  • Loans against shares – Have you been investing in equity shares for all these years? If yes, the good news is that, you can now avail a loan against equity shares. In this case, the amount of loan as well as the tenure of the loan is decided by banks. The interest rate typically varies within 11% and 16%. You shall get a maximum loan value of 50% of the value of your equity shares.

So, you see, gold loans are a great way to seek immediate financial assistance. Gold loans are secured loans and hence they require minimum eligible criteria and documentation mandates. So, getting your gold loan in your bank account is faster than ever before. Banks are more than happy to offer you gold loans because your gold serves as collateral, and in case you are unable to repay the loan, the bank can sell the same and get back its money. Thus, if you have been accumulating gold in fair amounts, make good use of all that hoarding!  Get some instant cash against gold loans when you need it the most.

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