As per the World Gold Council, India is one of the biggest consumers of gold in the world, and this trend indicates an increasing rate in the demand patterns. Apart from exhibiting the gold ornaments and investing money to purchase this asset, one can also utilize it as a collateral to finance any unforeseen incidents in life. Those non-functioning golds in lockers can be your monetary solutions to re-design your financial projects even when your credit rating graphs are on a lower edge. Don’t miss this opportunity to use the asset wisely and kick-start your process to avail of a loan against gold without much hassle.
Working Mechanism of Gold Loan
Similar to other secured loans, the gold is kept as collateral to procure a gold loan. You need to carry all your gold articles and ornaments to the lending institutions along with the required documents. After verifying the materials and evaluating the worth of your gold articles, the lender will sanction a certain percentage of gold’s value as a gold loan. As per the accord, the borrower can retrieve his gold articles after the repayment of the principal amount along with the interest rate.
How can you get instant cash by availing a Gold Loan?
No eligibility criteria
Unlike the stringent parameters entailing other secured and unsecured loans, a gold loan can be procured by an individual like business owners, salaried professionals, housewives, farmers, laborers, etc. The best thing is that there is no obligation of credit scores to determine the eligibility of gold loans. Therefore, any person who has gold artifacts can get instant gold loans.
Higher loan amount with gold loan
Before approving a gold loan, a lender will assess the net value of the pledged gold by its weight and purity. Further, the final worth is determined based on the market value of the gold. The loan amount sanctioned is typically 75% of the pledged gold current market value. Borrowers can get a higher loan amount if they opt for a gold loan, which may vary on other investments.
Used for a variety of purposes
The amount that is approved through the gold loan can be used for a variety of purposes. Unlike few other loans which come with stern parameters regarding its end purpose, a gold loan can be obtained to fund any situation be it’s your weddings, a foreign trip, medical emergency, property purchase, children’s education, etc.
Feasible interest rates
Another key advantage of availing a gold loan is the feasible interest rate when compared with unsecured loans like personal loans. Though the interest levied can alter from one lender to another. Generally, the interest rates charged by commercial banks are less in comparison with that of NBFCs. So, borrowers need to check this factor before applying for a gold loan.
Less documentation and instant loan disbursement
The absence of stringent limiting factors the documentation becomes easy and convenient for the borrowers securing a gold loan. The process requires KYC documents, and the loan amount gets instantly disbursed in your bank account.
This can be a go-to financial solution to get instant cash and fund your various needs. Still, one needs to be very cautious regarding the tenure as it usually ranges for a shorter period of 3-12months. This tenure is very short in contrast to other loans, and hence you must pay back the amount in the stipulated period. Defaulting might lead to the loss of your precious gold articles for a lifetime. Check and compare the different lending institutions as the tenures can differ accordingly.
Let us look at the different factors for which we can use Gold Loan?
- Generation of Working Capital
- Business Expansion or growing your existing venture
- Asset Acquisition
- Debt Consolidation
- Medical Emergency
- Personal Loan
Highlights about Gold LOan
- Minimum Requirements: Copy of passport, Driving license, Aadhar number, Voters Id, Passport size photograph, job card signed issues by NREGA.
- The amount of interest has to be paid only within the period of the loan.
- A Person is open to select any gold loan scheme as per his roles and goals
Some common FAQs for Gold Loan
Question 1 :
How much time will it take to avail of a gold loan?
After the complete processing and submitting your application. It will take not more than 10-20 minutes to provide you with the loan amount. It depends on two factors that s loan amount and purity of loan.
Question 2 :
What are the payment options?
There are two options for paying. Either you can pay Interest+Principal, or you can only pay the interest amount. The different payment options can include Cash, NEFT, RTGS, Cheques, or DD.
Question 3 :
What is the tenure for getting a gold loan?
The period of taking a gold loan can vary from 6 months to 1 year.
Is gold safe?
The gold jewels are safe. After the complete payment, the concerned borrower can take the loan. There are security guards, and also there are CCTV cameras that can be kept 24×7 for surveillance.
Invest in a Gold Loan and kick start your Investment today!