Households in India hold approximately 25,000-30,000 tonnes of gold, valued at nearly $5 trillion, according to a report by Kotak Institutional Equities. This gold constitutes about 65% of the country's non-property wealth. As families consider leveraging this asset, understanding the differences between a gold loan and a gold overdraft facility becomes important. A gold loan allows individuals to borrow a lump sum against their gold items, with interest rates ranging from 8.75% to 9.30% per annum. In contrast, a gold overdraft provides a flexible credit line, where borrowers can withdraw funds as needed and only pay interest on the amount used. Gibin John, a Senior Investment Strategist, emphasizes that for fluctuating financial needs, a gold overdraft is often more cost-effective than a traditional gold loan. However, both options come with risks, including potential penalties for late payments and the need for regular asset revaluation. Financial discipline is crucial to avoid over-borrowing and ensure that the benefits outweigh the costs.