In following ways you can use gold if you are facing financial crisis:

1) Loans against gold: you can take a loan against your gold jewellery and ornaments. Many banks and non-banking companies like Muthoot and Mannapuram can offer you loans almost instantaneously if you take a loan from them and offer your gold as a security.

Some lenders can give you a loan up to 80% of the value of your gold jewellery. Of course, you will have to pay interest on this loan, but you can negotiate the duration and the amount of interest and other terms that you might be comfortable with.

At the end of the loan period, you can get your gold back from the lender by returning the loan amount to the lender. These loans are safe, you can rest assured that this industry is regulated by the RBI and as long as you keep up your commitment of returning the loan, you will get your gold back.

2) Sell your physical gold or gold ETFs: Many families buy gold as a store of value that they can encash on a rainy day. Whether you own gold in physical form (jewellery, bars) or in paper form (ETFs), if you need to raise cash, you can consider selling your gold.

The advantage of selling gold is that its a market that is very liquid, which is a technical way of saying that at any given time there are many buyers who will be available and will offer you a market price for it. Of course, if you go to a pawn shop and tell the buyer that you are desperate to sell your jewellery, you might not get the best price for it. So don’t forget your negotiation skills if you want to get the best price.

3) Gold deposit schemes: Just like you can deposit cash into a Fixed Deposit and earn interest on it, you can also deposit your gold coins, jewellery into a gold deposit and earn interest income on it. Some banks like SBI offer this service. Your gold will be converted into bars and you will get a certificate to the effect.

There might be a minimum amount of gold that you must deposit (for SBI its 500 gms). At maturity, you have the option to get repayment either in the form of gold or equivalent cash amount. Rather than your gold lying idle, you can generate some interest income on it.

4) Leasing your gold jewellery: Leasing your gold jewellery is not yet done in the organised market, but there are certain places where you can lease out your gold jewellery for other people’s wedding. This is often practiced by retailers and beauty shops who provide wedding dresses. You can earn “rent” on your jewellery. You sign a written agreement with the shop and can get back your jewellery any time your contract expires or whenever you mutually decide.

Thus when you are in a tight financial situation, be creative and use your existing gold. Rather than keeping it idle in a locker. It certainly might be more cost effective than taking a personal loan, which might land you in deeper financial trouble.