There are various types of financial loans available for people in today’s generation. Gold loans are the most preferred and significant loan type available in the financial market. Any individual can avail of a gold loan with the help of their gold ornaments. The gold can be put to use when one needs it the most.
Golds are always usable for every urgent need in the funding of immediate financial requirements with just pledging it and not selling it. There are various financial banks and NBFCs in India that offer gold loans for their customers at the most attractive rate of interest. In India, a majority of the people possess gold as it is a sacred asset and holds value for many centuries.
Availing the gold loan will give immediate funds for any financial emergency that arises at any point in time. Many benefits come with availing the gold loan from any financial lender in the market. The key benefits are,
- Instant processing and disbursal- Gold loans are the most secured loans, and they offer very lenient eligibility criteria as well as very minimal documentation. Any individual can submit the gold jewellery to the financial lender such as any banks or NBFCs. These lenders will evaluate the gold jewellery and credit the loan amount to the bank account of the individual. The financial lender keeps the gold jewellery as collateral until the completion of the loan process with repayment. The value of gold is evaluated by the jewel expert on the spot while applying for the loan. It will take a few hours to assess and process the loan. Within two to three hours, the loan amount will be disbursed to the account. There is no credit score required for the approval of loans, and so these loans are usually disbursed in just a few hours instantly. The applicants who are eligible for the gold loan online mode can avail of the loan in minutes.
- Fulfils any short-term financial needs or goals- The tenure for repayment for the loan availed starts from six months and extended up to two years. It varies from one financial lender to another. The individual can also close the loan sooner than any other loans in the market. The loan availed against gold can always fulfil any short term needs and goals. If an individual has any long term needs, the loan can be customised to suit the long-term needs.
- Borrow in thousands and lakhs- In general, a personal loan or a business loan does not offer a loan when the amount required is less than one lakh rupees. In the case of a gold loan, an individual can borrow any amount between fifty thousand rupees and fifty lakh rupees with up to seventy-five per cent of the current value of gold in the market. The gold assets can support both small and substantial financial requirements of the individual.
- Gold is safe and secured- The financial lender will offer triple-layered security for any gold ornaments that are submitted as collateral. The gold of the individual will be secure as well as safe in the vault of the financial lender. When the individual completes the repayment for the loan, the pledged gold will be returned.
- No foreclosure charge- Most of the lenders do not even levy any pre-payment charges, which is different from some other banks as they charge a pre-payment penalty of 1%. The repayment is very flexible as the applicant is eligible to return the money in parts in-between the loan tenure as well as the entire amount before or at the end of the term with no pre-payment penalties involved.
- Use the loan amount for any purpose- An individual avails the gold loans for various purposes such as educational, medical, marriage expenses, business needs, and investment options. There will be no restriction for any individual on the use of the loan as one can make use of the amount for investment. It can be also helpful for purchasing essentials, home repairs, vacations, and any other purpose that can be legit or even illegal.
- Involves basic documentation and requires no CIBIL score- The personal loans and any other loans push the financial institution to have a check on the CIBIL score, income tax, income tax returns, and evaluation of financial capability. For availing the gold loan, one has to provide only basic documents such as identity proof, address proof, KYC documents, etc. as well as passport size photographs. Gold loans always do not require any information about credit scores or history of credits. In other cases, the loan amount is always given based on the repayment capacity and also the credit history of the borrower. Still, in the gold loan, the amount is decided based on the value of gold in the market.
- No income proof needed- Financial institutions always do not inquire about the income proof of the applicant in terms of the gold loans as the gold is secured. So the gold loan can be availed either by an earning applicant or one who does not.
- Zero processing fee- In most of the banks and NBFCs, there is no processing fee involved. And in some cases even if the lender charges the processing fees, it will be around 1%.
- Easy Eligibility Criteria- When an individual is above eighteen years of age, one can avail for a gold loan. It is the only loan available in the financial market that has the most relaxed eligibility criteria when compared to other loans. The loan approval for the gold loan does not include an emphasis on credit score, repayment capacity, or any CIBIL score. It emphasises mainly on the value of pledged gold. The gold loans are available for every individual, which makes it reachable to even homemakers as they can avail the loan without any effort.
- Lower interest rates- When compared to the unsecured loans, these gold loans are very secured and charge a lower rate of interest. Since the gold loans have collateral, one can reduce the rates even further. The individual need not worry about defaulting on the loan. In some cases, banks allow very lower rates which are very affordable and attractive when compared to any other financial product in the market.
- Flexible repayment options and lower monthly outflow- Any other loan in the financial market, has EMI with both interest and principal component inclusive of the loan amount. In the gold loan, one has to pay the interest amount on loan until the end of the tenure. The individual pays the principal amount borrowed when the tenure of loan comes to an end.
- Special Gold Loan Schemes- The government has many announcements with special gold schemes suitable for women and agriculturists. One can contact the financial institution where the individual has made an application for a gold loan to see if there are any new schemes and offers. The loan for the pledged gold is offered at attractive rates and discounts. There are special schemes that come with gold loans for business individuals and small as well as medium-sized firms for their business purposes.
Gold loans are the most affordable facility that an individual can avail of during any financial emergency. Gold assets are always valued, and it helps the financial lender to trust as well as estimate the gold to solve your financial crisis. The gold loan procedures usually vary from one lender to another as well as one financial institution to another. The gold loan works on a simple idea where you pledge the gold and avail of the loan amount. One can avail of a gold loan on the same day and have the funds disbursed immediately to solve every urgent need.