A Loan Against Pledge of Goods is a type of secured loan where the borrower pledges specific assets (goods) as collateral to secure the loan. This means that the lender holds the pledged goods until the loan is fully repaid. If the borrower defaults on the loan, the lender can sell the pledged goods to recover the outstanding amount.

Key features of a loan against pledge of goods:

• Collateral security: The borrower pledges specific goods as security, which can be anything from jewellery to inventory.
• Loan amount: The loan amount is usually a percentage of the value of the pledged goods.
• Interest rates: The interest rate on such loans can vary depending on factors such as the value of the collateral, the borrower's creditworthiness, and the lender's policies.
• Repayment period: The repayment period can range from a few months to several years.
• Loan processing time: The loan approval and disbursement process is usually faster than traditional unsecured loans.

Advantages of taking a loan against a pledge of goods:

• Quick disbursement: The loan can be repaid quickly, often within a few days.
• Larger loan amount: Borrowers can often get a larger loan amount than an unsecured loan.
• Lower interest rates: In some cases, interest rates on secured loans can be lower than unsecured loans.
• Flexible repayment options: Lenders may offer flexible repayment options to suit the borrower's needs.

Commonly Pledged Goods:

• Jewellery: Gold, silver, and diamond jewellery.
• Electronic gadgets: Laptops, smartphones, tablets, etc.
• Vehicles: Cars, motorcycles, etc.
• Inventory: The stock of goods held by businesses.

Before taking a loan against pledge of goods, It is important to consider the following:

• Valuation of collateral: Make sure the valuation done by the lender of the pledged goods is fair.
• Storage costs: Keep in mind the possible storage costs for the pledged goods.
• Insurance: Consider insuring the pledged goods to protect them from loss or damage.
• Prepayment: Check if there are any prepayment charges.

* INTEREST RATES *