Overdraft facility against gold cheaper than term loan, say experts

Opt for overdraft facility if you have a recurring need, a term loan if you require a lump sum

Gold loans were a key source of funding for those who found themselves in financial distress during the Covid-19 pandemic. According to the Reserve Bank of India data, the outstanding loan in this category stood at Rs 62,926 crore on August 27, registering a year-on-year growth rate of 66.2 per cent - the fastest among all categories of loans given to individuals.    

It appears that these loans will continue to be popular even in the near future. A recent report from CRISIL says that the assets under management of non-banking financial companies (NBFCs), which primarily offer loans against gold,