You can opt for any loan as per your need as there are many types of loans available. These include personal loans, education loans, car loans, property/home loans, etc. You can even get a loan against the gold kept in your home in the form of ornaments. Gold loans are seen as a secured asset by the banks and other financial institutions that provide gold loans. If you opt for a gold loan, you can use the money credited to you for any purpose like for purchase of property, vehicle, medical emergency, travel expenses, etc. Also, looking at the gold rate today, it seems there is a good market to take a gold loan.
Gold loans come with a lot of benefits, and there are few of them:
Instant Processing and Disbursal:
Processing a gold loan takes very little time that might be a few hours or less than 45 minutes. As soon as you give your gold to the bank, they evaluate the gold and provide you with the loan amount. The lender will keep your gold as collateral until you make all the repayments of the loan on time. The value of the gold is determined on the spot so that it doesn’t take time to give you the credit amount. The processing and disbursal here are instant.
Fulfills Your Short-term Financial Needs/Goals:
A gold loan can be used for your short term financial needs. The term of repayment of a gold loan starts from 6 months to 2 years. Unlike other loans, you can close the loan against your gold sooner.
You can Borrow in Thousands and Lakhs:
Apart from gold loans, other loans such as a business loan are not provided if the amount required is below 1 lakh. But taking a gold loan means you can get the credit of rupees 50 thousand to 50 lakhs according to 75% of your gold’s current market value.
Your Gold is Safe and Secured
The gold you provide as collateral is kept with full security under your financial institution. Your gold stays in safe hands under the bank till the time you repay your loan. As soon as your loan is cleared, you can get your gold back.
You Can Use the Loan Amount for Any Purpose
If you need funds for any purpose like an investment, education, medical purpose, business, marriage expenses, travel expenses, etc., a gold loan lets you use the fund that you get in a loan amount to use it for any financial purpose.
Basic Documentation Only, No CIBIL Score
When you opt for other loans, you need to provide a lot of documents such as your income, income tax returns, credit history, etc. But for a gold loan, you need to provide the basic documents such as your identity proof, address proof, passport size photograph, etc.
Easy Eligibility Criteria
Other popular loans are provided to people who are 21 years old or above. But you can get a gold loan if you are just 18 years and above. Your gold loan gets approved based on the market value of your gold ornaments and not on your credit score, repayment history, or other factors. So even if you are just a homemaker, you also can get a gold loan.
Lower Interest Rates
Unlike other unsecured loans, financial institutions charge a very low rate of interest against the loan they provide you for your gold.
Flexible Repayment Options and Lower Monthly Outflow
In a gold loan, you have to pay your interest amount charged on loan just until the loan tenure. And when the loan tenure ends you are supposed to pay your principal amount then. For other types of loans, both interest and principal amounts are included in the EMI, but it’s nothing like that with the gold loan.
Special Gold Loan Schemes
When you apply for a gold loan, you can ask your financial institution for the skills and benefits announced by the government under gold loans. There are special schemes for women and agriculturists, so you can ask your bank if you are eligible for any special scheme.
Gold loans are a wise choice in case of financial emergency as they are easy to get, in less time, with low-interest rates and more benefits.