Advantages of taking Gold Loan

A loan that is backed by gold is known as a gold loan. Indians can apply for gold loans to raise money because they have gold jewellery that is sitting in safe deposits. In an emergency, it is regarded as the fastest secured loan. To receive rapid funding, you must provide your loan lender with a guarantee of your gold jewellery or bank-issued coins. Typically, the loan amount is offered as 75% of the gold’s worth. Following full repayment of the loan, you will receive all the gold jewellery and coins you promised. Gold loans are offered by numerous banks and Non-Banking Financial Companies (NBFC). By visiting their bank or office in person, signing up on their websites, or downloading their mobile apps, you can use this service.

Before issuing a gold loan, lenders must complete a few procedures:

A large majority of Indians thought of gold as a valuable item because of its high monetary worth. Over the past ten years, it has experienced a sizable amount of capital growth, and in an emergency, one can easily monetize it. Because of this, more people choose gold loans than any other kind of loans.

The benefits of a gold loan are as follows:

1) Lower interest rate: Because a gold loan is secured, its interest rate is lower than that of other loans. The interest rates typically range from 11 to 16 percent.

2) Quick disbursement: Borrowing money secured by gold is safer for both the bank and the borrower. The simplest and quickest choice is the gold loan because it is backed by gold.

3) Lenders do not seek income evidence because the borrower is pledging gold as collateral. Therefore, anyone who is over 21 years old can easily obtain a gold loan.

4) Less Documentation: The gold loan doesn’t call for as many documentation as a personal loan or a mortgage. There are only two documents needed. One is proof of identity, while the other is proof of a local residence.

5) No credit check: Regardless of credit history, one can easily obtain a gold loan from any financial institution. Due to the gold being used as security, the lenders do not investigate the borrower’s credit history.

6) Lower processing costs: Processing costs for gold loans range from 0.5 to 1 percent. Banks occasionally don’t even charge it.

7) There are no additional fees: Other than late payment, foreclosure, and processing fees, there are none.

8) Gold Safety: The bank’s safe will keep your priceless item safe. As soon as you make a promise, your gold is guaranteed. Therefore, there is no reason for concern.

Banks and their rates of interest