Go for a gold loan if you are confident of returning the money on time. Otherwise you will be penalized and all the pledged gold will come under the control of the bank or the finance company. The NBFCs/ banks could act on the mandate given by the borrower (at the time of taking the gold loan) to adjust the loan outstanding including interest charged and unpaid against the gold by selling off the same. While opting for gold loan, check the interest rates in various banks and private NBFCs. If you prefer private lenders, it is better to go with the one who has been in this business for several years. As long as you are not emotionally linked to gold ornaments, taking a gold loan is the best option. Moreover, with the fall of the dollar and euro, and the fluctuating gold prices, it seems to be a safer option to pledge the gold than letting it be in your locker if you need money.