Gold Loan In India
We live in a society where on various occasions, we may need some extra funds such as for Marriage, for vacation, for honeymoon trip etc, however, Indian Households are well known for saving funds for emergencies, but still need of extra money may arise.
We have access to a variety of loan options. Personal loans, education loans, car loans, and property/home loans are the most common of these. Along with these options, you can also get a loan against your precious metals, particularly gold. Banks and NBFCs are eager to provide gold loans because the majority of us Indians own gold in the form of jewellery and because gold ornaments have seen significant capital appreciation over the years, they are considered a secured asset for providing a loan.
Taking out a loan against gold from an NBFC or bank provides you with immediate cash for most of your immediate expenses, such as a quick family vacation, vehicle purchase, medical emergency, and so on. Here are the top ten advantages of obtaining a gold loan from a financial institution.
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You deliver the gold jewellery to the financial institution, which evaluates it and credits the loan amount to your bank account. The gold is kept as collateral with the lender until the loan is repaid. The value of gold is determined on the spot by an expert, so you get the funds within a few hours, sometimes as little as 45 minutes, reducing processing and fund disbursal time.
- Fulfils Your Short-term Financial Needs/Goals
The loan’s repayment period begins at 6 months and can last up to 2 years, allowing you to close the loan sooner than most other loans. It also implies that loans secured by gold can be used to meet short-term financial needs and goals.
- You can Borrow in Thousands and Lakhs
A personal loan or a business loan is usually not available if the amount required is less than Rs. 1 lakh. However, if you choose a gold loan, you can borrow between Rs. 50,000 and Rs. 50 lakhs, or up to 75% of the gold’s current value. As a result, your gold assets can meet both small and large financial needs.
- Your Gold is Safe and Secured
The financial institution provides three layers of security for gold ornaments submitted as collateral. Your gold will be kept secure in a bank for the duration of the loan, and when you repay the loan in full, you will receive the jewellery back.
- You Can Use the Loan Amount for Any Purpose
Many people take out loans for investment, educational and medical expenses, business needs, wedding expenses, and so on. There are no restrictions on the loan’s ultimate purpose. You can use the money to pay for a necessary purchase, home repairs, a vacation, or just about anything else as long as the reason is legitimate and not illegal.
- Basic Documentation Only, No CIBIL Score
While personal loans and other loans require the financial institution to check your CIBIL score, your income, income tax returns, and so on, a gold loan only requires you to provide basic documents such as identity proof, address proof, and passport size photographs.
- Easy Eligibility Criteria
If you are over the age of 18, you can apply for a gold loan. Other loans are usually only available to people who are at least 21 years old. The value of your gold ornaments determines whether or not you are approved for a gold loan based on your credit score or repayment history. The loan is open to everyone (salaried, businesspeople, etc.), which means that even housewives can apply as long as they have a good repayment capacity.
- Lower Interest Rates
When compared to unsecured loans, financial institutions charge very low-interest rates on loans against gold. Because the bank/NBFC has your gold jewellery as collateral, it does not have to worry about recovering the principal loan amount if you fail to repay the loan. Some banks can offer rates as low as 10.5 per cent, whereas personal loans begin at 11.49 per cent -12 per cent and higher.
- Flexible Repayment Options and Lower Monthly Outflow
In general, the EMI for any other loan includes both the interest and principal components of the loan amount. However, with a gold loan, you only have to pay the interest until the loan is paid off. When the loan term expires, you repay the principal amount borrowed.
- Special Gold Loan Schemes
The government has announced special gold loan programs for women and farmers. As a result, you should contact the financial institution where you applied for the loan to see if there is any special scheme for a gold loan that you might be eligible for. Many people can get a loan against their gold at a low-interest rate. This loan also has special programs for business owners and small and medium-sized businesses.
A gold loan is one of the most cost-effective credit options for dealing with financial emergencies. Because gold assets always increase in value, lenders are more likely to trust you and provide you with a loan for the jewellery. On our website, you can apply for a loan against gold and receive funds the same day.
