"Gold is quite an investment", something that holds legitimacy and is widely accepted since the ages of our forefathers. This precious piece of metal not just adorn your jewelry collection but can also act as a savior helping you with monetary support in times of distress. Most of the banks out there supports gold loan. You must have seen Amitabh Bachchan endorsing one of those. Yes, these loans are quite common.

These are seen as a safe wager both in terms of asset quality and in terms of growth. The basic concept behind gold loans is provision of a bank loan to a client against pledge or the security of gold ornaments and jewelry. But are they a safe alternative? How risky are they? Can an individual throw all cautions to the wind while going in for a gold loan??

Let's address these concerns in this article.

1. One might overlook it's sparkle, but it is quite difficult to ignore the glitters of these gold loans. It is safe to go in for a gold loan because their soaring prices and ever-increasing growth of consumerism, nothing can really bring down its stature even in years to come.

2. Convenience is one of those reasons that one must consider while opting for this alternative. Gold loans are quite in demand as small business owners, borrowers look for ready cash. They are considered to be a great business model that can transcend the barriers of time.

3. Another important reason to choose gold loans over other variants of loans at your disposal, is it's low interest rates. Borrowing against gold as your guarantee is witnessing a sky-rocketing demand because of the lower interest rates, a client has to agree upon, as compared to other retail loans such as those personal loans. Rates for gold loans vary between 10% to 24% per annum as compared to personal loan rates as high as 26% per annum that is dependent on your credit profile.

4. One more factor from interest point of view is that most banks allow the clients to pay the interest calculated on the loan monthly and the principal amount of payment at the end of the term and not as an equated monthly installment. Even if you fail to pay the loan within a stipulated time period, the bank will charge you a higher interest rate.

5. If you are an individual with a bad credit score with faint chances of recovery, Gold loan is made for you. It is often suggested to take a gold loan if you don't have enough resources to pledge.

Decisions revolving around money, are never entirely full-proof. But Gold loan proves to be one of those short term decisions that ends up in long term benefits if you grab the right opportunities. Hence, you can completely trust this asset to contribute infinitely in helping you grow financially.