Gold Loan Benefits: Lending money against gold jewellery has a long history in the Indian culture. And many loan providers and NBFCs later on leveraged this factor, and began offering personal loans against gold. In fact, golds loans turn out to be of great value in times of crisis. Needless to say, there are certain benefits that individuals can reap from this kind of loan.
What are the benefits of gold loans?
- Faster processing :-The foremost benefit of this kind of personal loan is that, processing happens in the fastest possible manner. As golds loans are backed by physical gold, bankers are often happy to give out the loan much easily. Its even safe for banks or financial institutions as, they have the option to sell of the physical gold in case of default. This is one reason why banks disburse such loans within a few hours.
- Simpler repayment procedure:-Yet another benefit of gold loan happens to be its simpler repayment procedure. It’s a unique feature where the borrower to choose to repay the interest amount beforehand and the principal amount at a later stage or during the closure of the loan. This unique feature makes golds loan pretty much attractive to many.
- Lower interest rates:-The next benefit of golds loan is the interest factor. This kind of a personal loan offers lowered interest rates as they happen to be secured loans. On an average usual personal loans charge interest ranging anywhere between 15 per cent and 18 per cent. However, interest rates for a golds loan start from around 13 per cent, thus making it more affordable for the average Indian.
- Zero processing fees:-Since golds loans are given instantly in lieu of physical gold, most banks and NBFCs choose to waive off processing fees. This is all the more because, the physical gold is considered as a collateral, which the bank already keeps with itself for a certain duration.
- Credit history is not an issue:-If you want to avail a loan, usually banks or financial institutions check for a credit history. If your credit history is low, they often reject loans. However, in order to avail golds loans, no such thing is required. Since the person availing loan needs to deposit physical gold with the bank, the latter does not demand credit history.
Hence, on a final note, it can be said that, availing golds loans have quite a lot of benefits and can rescue you in times of dire situations. However, a thorough research is always recommended before opting for a golds loan.
How to apply for a gold loans?
A gold loan is a type of loan where you use your gold as collateral. The interest rate on a gold loan is usually lower than a personal loan or credit card, making it a good option if you need to borrow money. Here’s how to apply for a golds loan.
- Find a lender: You can apply for a gold loan at most banks and financial institutions.
- Calculate the value of your gold: The value of your gold will be used to determine the amount of money you can borrow.
- Apply for the loan: Follow the lender’s instructions on how to apply for the loan. Be sure to have all the required documents ready.
- Repay the loan: Once you’ve received the loan, you’ll need to repay it with interest according to the terms of your agreement.
Types of gold loan?
There are two types of gold loans: secured and unsecured. A secured gold loan is one where the borrower pledges their gold as collateral for the loan. An unsecured gold loan is one where the borrower does not have to put up any collateral for the loan. Both types of loans have their own set of benefits and drawbacks.
- Secured gold loan is typically going to have a lower interest rate than an unsecured gold loan. This is because the lender has the security of knowing that they can sell the borrower’s gold if they default on the loan. However, this also means that the borrower is at risk of losing their gold if they cannot repay the loan.
- Unsecured gold loan does not have this same level of security for the lender. As such, the interest rates on these loans are typically higher than secured gold loans. However, this also means that the borrower does not have to worry about losing their collateral if they cannot repay the loan.
What Gold loan interest rates?
Gold loans are a type of loan where you use your gold as collateral to borrow money. The interest rates on gold loans are usually lower than other types of loans, making them a good option if you need to borrow money but don’t want to pay high interest rates. You can use the money you borrow from a gold loan for any purpose, such as paying for medical bills, home repairs, or even starting a business. To apply for a gold loan, you will need to have some form of collateral, such as gold jewelry or coins. The amount of money you can borrow will depend on the value of your collateral.
Conclusion
Gold loans are a great way to get quick access to cash. The interest rates are usually low and the repayment terms are flexible. You can use the money for anything you need, including emergencies, home improvements, or investing in your business.
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