I’m a bit confused some people say gold loan is safe to take because it’s backed by something. So just wanted to confirm, is a gold loan considered a secured loan or an unsecured one?
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Gold loan is secured loan as you have to pledge your gold( jewellery or coins) as collateral to lender, which reduces their risk as they has the right to auction your gold if you default on the loan. Because of this, the interest rates on gold loans are usually lower than unsecured loans like personal loans.
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