In India, gold has known to be the only commodity, which can with stand inflation. Indians are one of the biggest consumers and importers of gold in the form of jewellery and coins. For: gold as a liquid asset can be easily converted into cash.
Many nationalised and private banks and other financial investment companies are giving loans against idle lying gold ornaments. Some provide hassle free, conveniently available loans, with low rate of interest, without much documentation. At times, gold loan does not require you to provide any income or salary proof. As per government rules, the gold loan companies can lend only up to 75 % of the value of gold.
Over the years, many banks and financial investment firms have floated Gold Mutual funds in the market as well. Gold ETFs are units representing physical gold, in paper form. These units are traded on the exchange like a single stock of any company. It’s actually investing in the Gold Bullion Market without the hassle of keeping gold in material shape. Buying and selling takes place through trading of the gold stock.
While investing in ETFs or gold financing (loans), interest rates and reputation of the investing bank or private finance company is foremost. Considering this, we have framed our top 5 list.
5. Mahindra Gold
It offers instant and secured loans of up to Rs. 1 crore depending on the gold. Loan period can be for a week to a year. Documentation will include income proof, which is drawback amongst other Gold Finances available. As of now, gold loans are only available in selected branches of Kerala and at Mahindra Finance Priority Branches.
4. SBI bank
SBI is the largest National bank with undeniably the largest network in India. It offers loan against gold at the lowest rate of interest. The maximum period for repayment of loan is 30 months, more than any private or public player. It provides loan to agricultural farmers as well. Only drawback is that it provides the maximum loan of Rs. 20 lakhs only. The documentation required is the same as for opening a bank account. It also has ETFs.