We Indians are fond of gold. We have an undying likelihood for gold, which is not unknown to the outer world. Moreover, India is the biggest gold importer around the globe. Know why we love gold? We love gold and invest in it as it comes across as a rescue in times of financial emergencies or crunch. To gain monetary benefit from gold, one does not necessarily require selling it. Benefit from it can be gained by availing of a loan against gold.
What is a loan against gold?
Availing of a loan in lieu of your gold jewellery and ornaments, which are secured by a lender, is one of the quickest and simplest ways of cumulating funds during emergencies. This means of raising funds is called a gold loan, which is handy, particularly in the situation of financial needs. Parameters like gold purity, its latest prices and various other important details play a crucial role in determining your loan amount during the process.
Why avail of a gold loan?
If your gold ornaments hold the potential and have high purity marks, then they can be used for financing your exigency needs like child higher education, medical emergencies, business expansion, down payment for purchasing a car, holiday with family and others.
Over the years, gold has viewed tremendous appreciation in capital and is of high value. If you face any dire situation and require urgent finances, then the gold lying around in your home or locker can be put to good use with the assistance of a gold loan. Gold loans often are disbursed quickly, and it is one of the hassle-free ways of availing cash instantly.
What are the advantages of a gold loan?
There is no hidden fact that a gold loan is one of the instruments that can be used to gather funds in a quick, safe, and easy manner to meet your financial requirements. However, do you know that such precious loans offer way more than raising an amount? Note that a gold loan from any major financial institution is one of the highly sought-after instruments, as you can enjoy various attractive advantages when availing of a loan against gold.
Listed here are the top seven gold loan benefits that await you when opting for a loan against gold –
Fast processing times –
One of the major gold loan benefits is its quick processing times. As gold loan includes gold ornaments, jewellery etc., as security or collateral, banks or lending institutions can provide loans way more easily. For banks, it becomes not just an easy but also a safer mode as they can always sell off the gold in the case of discrepancies or loan defaults and simply retrieve their money. For this purpose, processing takes place in the fastest possible way. In fact, gold loans availed by most lenders are generally disbursed in a matter of just a few hours and hence add a lot of convenience for the loan applicant.
Fewer documents are required –
The next major important benefit of opting for a gold loan through HDFC gold loan or any other lender is that lesser documents are required. A simple KYC process is done to ensure easy submission of just a few necessary documents. Important documents that you must keep handy for a gold loan are identity proof and address proof. There may be no requirement to provide any income proof as lenders do not consider your income for deciding the loan amount. To decide the loan amount, your gold value and its purity are examined by lenders. Moreover, as it is secured in nature, the lender also does not factor in your credit profile for deciding your eligibility for the loan.
Lower rate of interest –
The gold loan attracts a lesser rate of interest than unsecured loan options like a personal loan. When the loan amount is hefty, even a little reduction in your rate of interest can result in huge savings. This is because the gold loan, by nature, is secured, making them a good proposition for applicants. You can simply avail of the loan at the latest rates, which are lower than other credit options.
No processing charges and foreclosure fees –
A gold loan from lenders like banks, NBFCs or fintech may charge negligible to no processing charges, as loans are availed quickly against your physical gold is held by the bank. Likewise, prepayment penalties or charges are even waved off by many lenders. Waiving off the gold loan processing fees and foreclosure fees further assists in lowering your expenses and overall payout.
Flexible repayments –
The next major benefit of taking up a gold loan is the availability of flexibility in repayments. You can select different repayment options like regular EMI, bullet repayment, or repaying only the interest proceed during the tenure and principal upfront on maturity or easily repaying both the interest and principal upfront towards the end of the tenure.
Zero income proof or excellent credit score required –
Another important benefit is the eligibility for a gold loan can easily be met. When you place an application for a gold loan, there is zero need for income proof or any good credit history. As the loan by nature is secured, lenders do not ask for any income proof or credit profile as they are thoroughly assured about your repayment capacity owing to the security or collateral.
Security or collateral of physical gold –
As the bank or lender is responsible for the gold’s safety once the loan amount is disbursed, you have no headache of storing the gold in a safe and secure place. Also, you mostly tend to store your gold in the bank’s locker or vault, which is considerably safer and more secure than your house. Once the loan is fully repaid, you get back your gold safely.
In case you are looking for a good and reliable lender for a gold loan, then you can consider approaching HDFC gold loan, Muthoot Finance, Mannapuram Finance, South Indian Bank etc. You may also consider approaching the lender with whom you hold a long-term banking relationship to get details about a gold loan.
