If you are one of those looking for funds, then note that there are various options available, but you must be very cautious before deciding. If you have gold ornament and jewellery, then the gold loan is an excellent option you can go for to get speedy disbursement and high flexibility. Also, as the gold loan is secured in nature, lenders like IDBI gold loan, Bank of India, State Bank of India, and others tend to offer lower IDBI gold loan interest rate, lower bank of India rates and lower State Bank of India rates.
What’s a gold loan?
A gold loan is a secured credit option that requires you to submit your gold ornament and jewellery in the form of security or collateral to avail the fund you desire. It is considered a viable choice for short-term cash requirements.
What are the prudent ways of availing funds for a short-term period?
∙ Loans can be taken up for short-term requirements.
∙ No requirement to mortgage your gold jewellery.
∙ No requirement to approach the lender.
∙ Can be used for funding your business requirements or for any financial mismatches.
What are the characteristics of a gold loan?
Higher loan proceeds –
As compared to a personal loan or loan against credit card, a gold loan generally has a higher maximum cap on loan proceeds. Personal loans of as high as Rs 30-40 lakh are available for most financial institutions and banks whereas gold loan proceeds can be as high as Rs 5 crore from some top lending financial institutions. Thus, a gold loan is a prudent choice if you are looking for considerable borrowing.
Zero credit history is needed –
With a gold loan, you do not require being concerned about your score as banks do not factor in your credit history. Before availing the gold loan, you generally are not obliged to disclose your existing debts or loan obligations.
Also Check: IDBI Gold Loan Interest Rate
Low rate of interest –
Usually, gold loans come with a lower rate of interest than a personal loans, meaning gold loans are less costly than other credit types. Also, you will be required to repay less EMI on the gold loan than other credit options from your pocket.
Flexibility in repayment –
Unlike other credit options, gold loan offers distinct repayment choices. The 3 most typical repayment options are –
∙ Option for periodic EMIs or
∙ Pay just the interest during loan tenure and the rest of the balance towards the end or
∙ Pay just the interest and the loan balance post-completion of the tenure with zero payment made during the meantime.
Gold loan – terms & conditions
∙ You must fall between the age group of 18 – 60 years of age.
∙ You must offer gold jewellery or ornament of a particular karat weight and value, which will be approved depending on the gold market rates of that day.
∙ You must offer your photo identification proof, involving an Indian passport, driving license or voter ID card.
So, from the above, now you know that gold is one of the safest choices wherein you can park your funds. For decades, many have bought gold in very small amounts for various reasons like financial fall-back plans and wedding gifts, etc. Thus, gold in addition to holding monetary value even has sentimental value attached.
A gold loan is one of the prudent solutions through which you can generate instant funds if you do not want to sell your assets or wait for personal and various other loan approvals. Here, you get immediate liquidity, as you do not require any credit score or undergo a documentation process to avail the required loan proceeds. There are various gold loan advantages including quick disbursals, flexible repayment choices, minimal documentation, and ease of making applications. All of these endow full freedom to you to use the availed proceeds for any expense you want. They even have lower interest rates than other credit options available to you.
In case you are one of those with physical gold in your vaults, then you can consider opting for the gold loan option, which is one of the valuable ways of generating liquidity. In this way, gold becomes one of the active investment routes in place of passive ones. Here in this article, discussed ways how a gold loan is one of the best solutions for mitigating your financial requirements.
Top benefits of opting for a gold loan –
Simple eligibility parameter
Any of you above the age of 18 years can take up a gold loan. This option does not require you as a borrower to hold a high credit score. With such a flexible eligibility parameter, each one of you can use the loan the right way as per your repayment potential.
Simple application process
Lenders approve the gold loan depending on the gold value pledged. Gold does not need any income details and past credit records, unlike other loan processes. KYC of a customer i.e., the Aadhaar card, PAN card and a few of the basic info are sufficient to begin the procedure.
Gold is the security that lenders can simply use in the event of any default. This collateral is one of the fundamental reasons for the straightforward application procedure of a gold loan. Note that the gold you mortgage is stored in a high-tech vault, which ensures high safety.
Quick disbursal
The gold loan option requires extremely minimal disbursal time. After you place the application for a gold loan, the lender tends to evaluate the value of gold. After computing the valuation, the lender instantly transfers your loan proceeds to your account.
According to your requirement of you as a borrower, the loan proceeds are directly transferred online or offered in the form of cash. For loan proceeds less than Rs 2 lakh, you as a borrower can consider online transfer or avail the loan proceeds in cash form. However, loan proceeds for over Rs 2 lakh are transferred just to your savings bank account.
Zero CIBIL score requirement
NBFCs and banks usually tend to turn down your loan application if you hold a lower credit score. But if you as a borrower do not have a good score, then also you can avail a gold loan. Gold loan amount disbursal is approved depending on the gold’s purity only. For NBFCs or banks, the gold item mortgage is enough as security with zero requirements for a good score.