Stressed about weddings expenses? 6 ways a gold loan can help

Many families find themselves facing a cash crunch and start looking for quick ways to bridge the gap.

Even carefully planned celebrations can get expensive once you factor in venues, décor, catering, and jewellery. (Credit: Pixabay)

Weddings are joyful occasions, but they can also put a real strain on family finances.

Even carefully planned celebrations can get expensive once you factor in venues, décor, catering, and jewellery. Many families find themselves facing a cash crunch and start looking for quick ways to bridge the gap.

One option that often comes up is a gold loan. It can offer fast access to funds when time and money are tight. Though it is not the ideal solution for everyone, in certain situations, it can act as a practical short-term tool. Before deciding, it’s important to understand how it works and what you must consider before opting for it.

Quick access to wedding funds

A gold loan is a secured loan where the gold is pledged as collateral. This means minimal eligibility and paperwork checks, compared to unsecured loans. Many banks and NBFCs can process and disburse the loan within hours or a day, making it one of the fastest ways to access emergency funds during a wedding.

Lower rates make borrowing affordable

As the loan is secured against gold, the interest rates are usually lower than those on personal loans. This makes gold loans a more affordable choice for short-term needs. Banks and NBFCs often offer rates well below other loan options, which helps keep
monthly repayments manageable.

Flexible repayments

Lenders offer a range of repayment options for gold loans, including monthly EMIs, bullet repayments, or flexible tenures. This gives borrowers room to choose a structure that suits their cash flow. The ability to repay at a comfortable pace helps avoid unnecessary strain. It also ensures there are no extra charges for choosing one method over another.

Keep your assets intact

A gold loan gives you quick access to cash while allowing you to keep your existing assets intact. There is no need to sell jewellery, redeem investments, or disturb long-term savings to manage wedding expenses, making it a practical solution. This means, you are prepared for the celebration without touching what you’ve built over the years.

Story continues below this ad

Funds based on gold, not credit

A gold loan is approved based on the value of the gold you pledge, not your credit score. This means you may still be eligible to borrow even with a weak credit score. However, the gold, being the collateral, must meet minimum purity standards, usually 18 karats, and the loan amount will depend on its purity and weight.

Manage unexpected costs easily

Gold loans can be useful when expenses rise unexpectedly, which often happens during weddings. Their quick processing and flexible repayment ease the immediate cash strain, allowing families to move ahead with their plans without feeling financially stretched.
With the wedding season at its peak, the option to access funds quickly can seem rather tempting. But remember that your gold is pledged, and missing repayments means the lender can auction it to recover the loan. Used wisely, a gold loan can be a handy short-term help, letting you cover wedding expenses without losing sleep over your finances.

The writer is CEO, BankBazaar.