Gold loans have emerged as one of the most popular loan options in India in recent years. With gold prices touching record highs, lending institutions are more than happy to advance loans against gold jewellery. For women specifically, gold loans can be an excellent financing tool for a variety of needs. Here are the top 5 gold loan scenarios for women where women can benefit by pledging their idle jewellery or ornaments:
1. Starting a New Business Venture
For homemakers, accessing funding to start a new business can be challenging at times. Banks and Non-banking Financial Companies (NBFCs) may be reluctant to provide business loans without collateral or a co-applicant. This is where gold loans come in very handy. Women who possess gold jewellery can easily avail of a gold loan to fund their business dreams.
When it comes to women's loan eligibility, a gold loan for women can be availed quickly in just a few days without much paperwork. The gold jewellery is safely stored in the locker of the lending institution, and women entrepreneurs can access funds ranging from a few thousand to a few crores based on the quantity and quality of gold. The biggest advantage is that gold loans can be availed at low interest rates, generally starting from 9% onwards. Therefore, women keen on starting a new venture like a boutique, bakery, tuition centre, etc., must consider this hassle-free financing option.
2. Expanding an Existing Business
Women who already own small businesses like beauty parlours, catering units, boutiques, etc., often need additional capital to grow the business by adding new equipment, increasing inventory, hiring staff, getting a larger workspace, etc. Rather than relying solely on the operating profits of the business for expansion, business women can opt for a gold loan.
Taking a gold loan for women entrepreneurs ensures steady capital infusion without much paperwork. Women can continue to run their existing venture smoothly while utilising the gold loan to scale up operations. As expansion leads to increased turnover and profitability, the gold loan can be easily repaid from the enhanced operating income of the business.
3. Funding Overseas Education
Good quality higher education abroad can cost a fortune for middle-class Indian families. Tuition fees can run into lakhs of rupees, and there are other expenses. Funding a child's international education is tough for most parents.
Here, gold loans come to the rescue for women who have accumulated gold jewellery over the years. By pledging a portion of the family gold as collateral, mothers can easily raise funds to support their children's education abroad. The loan can be used to pay the tuition fees, hostel expenses, travel costs and other related expenses. As mothers are emotionally attached to their children’s future, gold loans provide the means to fund premium global education.
Moreover, women who want to pursue higher education can also use gold loan to fund their dream careers, whether it is within the country or abroad.
4. Covering Wedding Expenses
Indian weddings involve extensive preparations and costs for both the bride’s and the groom's families. The sheer scale of expenditure on wedding outfits, jewellery, venue, food, entertainment, and decor can burn a hole in the pocket.
With gold loan financing, women across families can meet the substantial wedding expenses comfortably. Mothers who have inherited ancestral gold jewellery can obtain sizeable loans against such gold to pay for various wedding-related costs. The financial burden is reduced significantly. After the wedding, the loan can be repaid over 12-60 (or more) months from the regular household income.
5. Handling Medical Emergencies
Sudden medical emergencies like accidents or critical illnesses often require lakhs of rupees for hospitalisation, surgery, medicines etc. Not many households have adequate savings to manage such emergencies. Moreover, personal or health insurance may not be adequate to cover all the costs.
In case of medical crises, gold loans come to the rescue as they can be obtained quickly within a day or two. By pledging gold ornaments, women can raise emergency funds for hospital expenses on behalf of self, spouse, or other family members. Once the emergency is managed on time, the loan can be repaid comfortably. The family gold remains intact while also helping manage a health crisis.
Conclusion
A quick gold loan for women enables access to sufficient funds during emergencies or to fulfil important needs. The main advantages are simple documentation, speedy sanction, no income requirement, lower interest rates and flexibility of repayment. Of course, one must be cautious and deal only with reputable lending institutions and not fall trap to unauthorised lenders.
If gold loans are managed prudently, they can be a real blessing for women across various life stages. Financial independence and stability are achievable with some careful planning.
