What is the Gold Overdraft Credit Facility: Risks and Rewards


oi-Shubham Kumar


You don’t always need a good credit rating to get a loan. If you have gold with you, you can easily get a loan and spend as you need. By using your gold for loan purposes, you can easily get a decent amount in your account for your spending needs. But how and where?

There are two ways to get gold loan credit. These are the Gold Loan Overdraft Facility and the Gold Loan EMI Option. By using anyone, you can meet the various needs of life and accomplish your pending work with the loan amount. Which one you should select is determined by your financial needs.

However, the Gold overdraft facility could be a good option because it works the same way as credit cards. A credit card is a credit facility that is widely used by consumers for their spending. In a gold overdraft loan, the amount you get is equal to your gold loan amount and it works the same as using a credit card.

When you deposit gold as collateral with your lender, they create an overdraft account to which the loan amount equal to the value of the pledged gold is credited. Another option is to use separately issued checks for the overdraft account in order to access the loan amount. In the event of an overdraft, interest rates are significantly higher than normal. Also, unlike a gold loan with an EMI option, an overdraft facility payment option is a lump sum payment that can be stopped at any time.



  • With the Gold Overdraft Loan facility, you can spend as much as you want, when and where you want, as long as your credit limit is not exceeded.
  • Use the funds anytime and anywhere.
  • You can shop online, transfer payments and pay bills directly from the loan amount,
  • Use the Gold Loan with an ATM card, mobile banking and online banking.
  • With an overdraft, you only have to pay interest on the amount borrowed.
  • During the loan period, release / replace the gold ornaments.
  • Alternative locker with free gold ornaments insurance.
  • Instant approval and easy processing.
  • Paperwork is minimal and funds are disbursed quickly.
  • The loan will be secured by the pledge of 22 kt gold jewelry.
  • The rates per gram are higher.


  • Inflation, global fluctuations in the price of gold, government purchases of gold, and the mismatch between supply and demand in the jewelry industry are all factors which have an indirect or direct impact on interest rates on gold loans.
  • Gold loans are often used for short and medium term financing. Make sure you pay it back within the allotted time and that your gold is returned to your treasury.
  • Understand the valuation methods adopted by lenders. Remember that none of the lenders will provide the full value of your gold in the form of a loan. It is necessary to note that the amount of money obtained from gold loans varies in different banks depending on the amount of the margin.
  • Do Thorough Research Before Choosing A Gold Lender! The rules and structure of repayment differ from one lender to another.
  • Consider the fact that gold loans have higher interest rates than educational and residential loans. Hence, you need to compare the interest rates offered by different banks. A high interest rate could upset your financial equilibrium.


This facility is designed to help those in need of short term emergency loans without having to make a significant new commitment. In addition, this credit being granted in addition to an existing loan, the customer does not need to provide new documents.

Although the eligibility requirements for credit cards seem straightforward at first glance, those who cannot match any of them may not be able to use this product. Even those who qualify will face additional restrictions for a personal loan secured by a credit card. In that case, a Gold Overdraft loan facility could help you meet your hassle-free needs.

Comments are closed.