A gold loan is a quick way to raise funds in times of need. In an earlier post, we had discussed gold loan products from the State Bank of India. With such gold loan products, you can take a loan against physical gold and jewellery. However, purchasing physical gold and gold jewellery is not the only way of owning gold. As an investor, you can also take exposure to gold by way of Gold Mutual funds, Gold ETFs and Sovereign gold bonds too. Is there a way through which you can monetize these gold investments while continuing to retain ownership these investments? To put it simply, can you take a loan against these gold investments? Yes, you can.
In this post, let’s look at a loan product from the State Bank of India where you can pledge your Sovereign Gold bonds to get a loan. Please understand this loan product is only for loan against Sovereign Gold Bonds (and not gold mutual funds or gold ETFs). Before, we dig deeper into the loan offering, let’s first look at the basics of Sovereign Gold Bonds.