A gold loan is a preferred way to get immediate funds with end-use flexibility. Recently, the demand for gold loans has increased due to its favourable features and competitive interest rates. You can use it for debt consolidation, building credit scores, medical expenses, or covering educational expenses. Top lenders offer quick and easy gold loans with the best interest rates.
Gold is a precious metal that is seen as a symbol of wealth. It is passed on from one generation to another in Indian families. It is a great asset that can be used when you need immediate funds. A gold loan is one of the easiest ways to get funds when seeking financial assistance. Many banking and non-banking financial companies (NBFCs) offer the best gold loans at affordable interest rates with no end-use restrictions. Here are some of the ways to use the gold loan to manage family finances: –
Debt Consolidation
A gold loan can consolidate debt into one loan at a favourable interest rate. It allows you to repay multiple debts and consolidate them into one loan. It helps save money by closing loans with higher interest rates. Usually, a gold loan comes with repayment flexibility. It is a great financial strategy to swap a higher interest rate loan with an affordable gold loan.
Finance Business Venture
If you want to start your business or are planning for business expansion, you can use the gold loan amount. A gold loan offers instant access to funds that can be used for operational purposes or long-term business plans. You can bag favourable terms from lenders as a gold loan is a secured loan. Moreover, the interest rate paid on the gold loan for business purposes is tax deductible under the Income Tax Act of India, 1961. It is one of the best ways to reduce tax liability.
Tax Benefits
Gold loans taken for specific expenses can give you tax benefits. For instance, if you take a gold loan for home repair and improvement for up to 1.5 lakh, you can get a claim deduction of up to 2 lakhs under Section 24 of the Income Tax Act. It specifies that the loan is taken for the purchase of residential property.
Investment Purposes
You can take a gold loan for investment purposes. You can use the gold loan funds to invest in high-return investments to gain profits. It increases the cash flow which helps to build your financial stability. As gold loans offer a higher loan-to-value ratio, you can invest a substantial amount for wealth building.
Education Purposes
Higher education expenses can take a toll on a family’s finances. With a gold loan, you can bear the cost of education without liquidating any asset. Gold loans attract lower interest rates and have excellent features. Also, you can get immediate funds to cover tuition fees and other education-related expenses.
When taking a gold loan per gram rate for a particular day is a key deciding factor. The higher the gold rate, the higher the loan amount you can get. Taking a gold loan and repaying it on time can help build a healthy credit score. So, you are not only managing your finances but also building a good credit history. Rather than keeping gold in your locker, you can put it to use and manage your financial commitments.
