Rising Gold Prices: Why Now is the Right Time to Avail a Gold Loan
Rising Gold Prices: Why Now is the Right Time to Avail a Gold Loan
Gold prices in India have been surging in recent years. In 2024, the average price of 24K gold was about ₹78,245 per 10g, up significantly from previous years. In early 2025, prices crossed ₹85,000–₹87,000 per 10g . approaching all-time highs. This rise is driven by global market demand, inflation concerns, and investors seeking safe havens.
For ordinary savers and borrowers, high gold prices mean your jewellery is more valuable than before. Why does this make it a good time for a gold loan? Simply put: more value from the same gold. The amount you can borrow is tied to the gold’s market rate. When rates are high, even a small piece of jewellery can secure a bigger loan.
For example, if your gold was valued at ₹4,000/g a year ago, and now it’s ₹5,000/g, your loan amount increases by 25% for the same gold weight. This extra loan eligibility can help cover rising costs of wedding expenses, education, or health bills without selling the gold.
As one leading report notes, with “soaring prices, households and small businesses are leveraging gold for instant loans, unlocking capital without selling a gram.”
Lenders themselves report a boom: gold loan demand is rising steeply, and the organized gold loan market (currently over ₹7.1 lakh crore) could double by 2029
Key reasons to consider a gold loan when prices are high:
- Higher Loan-to-Value: Lenders usually lend a percentage (e.g., 75%) of gold’s current price. Higher price = higher absolute loan. You could finance a larger expense or invest in business sooner.
- Interest Comparisons: With rising inflation, gold’s appeal as collateral is even stronger. Gold loans still often offer lower interest than personal loans. You effectively lock in your gold’s high value now, rather than risk needing cash later.
- No Need to Sell: Rather than sell your gold at peak price (and lose the asset), you pledge it. After repaying, you reclaim the same (now appreciating) gold. You gain funds today but hold onto future gains.
- Emergency Buffer: High gold price can act as a safety net. If costs unexpectedly spike (e.g., a new medical treatment), you can tap your gold’s value at a good rate.
That said, borrowers should be mindful: gold prices can fluctuate. If prices fall sharply during your loan, the bank may ask for extra gold or faster payment (due to LTV rules). However, with prudent borrowing (taking only what you need) and Kandhavillas’s guidance, risk can be managed.
For short-term needs or one-time big expenses, locking in a loan now can be advantageous. In fact, experts emphasize using gold wisely. They warn against borrowing to buy more gold (speculative); rather, use the cash for necessities or investments that grow value. But if you already planned to raise funds, the current high gold rate means your same gold pledge yields a bigger loan.
Illustration: Imagine you need ₹1,00,000 for starting a small shop. You have 20g of 24K gold. A year ago at ₹4,000/g, your gold was worth ₹80,000, and at 75% LTV, loan would be ₹60,000 – not enough. Today at ₹5,000/g, your gold is ₹1,00,000, so you can borrow ₹75,000. That extra ₹15,000 from price rise could make a big difference, or allow you to ask for less additional financing.
To sum up, rising gold prices boost the borrowing power of your jewellery. Now can indeed be a good time to take a gold loan, as you unlock more value on your terms. Kandhavillas Fincorp’s gold loan service helps customers tap into this opportunity. With transparent policies and fair rates, Kandhavillas ensures you benefit from today’s rates while promising to return your trusted gold once the loan is repaid.
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