In order to avail a gold loan, the loan borrower needs to pledge his/her gold asset(s) as collateral. Gold loans are secured credit provided by banks. However, before taking a gold loan, a person needs to know a few important things about the loan.
If you are planning to borrow a gold loan, then read this article to know more about it.
If there is a financial emergency, then you will need funds quickly. However, what will you do if you don’t have sufficient funds? Gold loans can be extremely beneficial in such a situation. You can avail a gold loan to meet the expenses.
What is a Gold Loan?
A gold loan is a secured loan that you can avail by keeping your gold asset(s) as collateral. You can get financial assistance for multiple purposes by taking a gold loan.
The Benefits of a Gold Loan
- Interest Rate
Gold loans are secured loans. Therefore, the interest rate on gold loans is lower compared to personal loans.
- Multi-purpose Loan
Most of the types of loans can be availed for a single purpose. However, a gold loan can be availed for multiple purposes. For example, an automobile loan can be borrowed to purchase a vehicle. A home loan can be taken to buy a house.
A person can borrow a gold loan for different reasons. He/she can take it if there is a medical emergency. It can also be borrowed to pay for a huge expense.
- Faster Process
A gold loan can be taken by keeping gold as collateral. Therefore, the process of availing a gold loan can be hassle-free. Hence, most banks give the loan amount quickly.
- No Requirement of Credit History
If a person wants to borrow a gold loan, then he/she must pledge his/her gold asset as collateral. Therefore, the borrower can get a gold loan even if his/her credit history is bad. Banks provide gold loans to people because they know they can sell the gold asset to recover the money. Thus, any person with a bad credit history can avail a gold loan to meet the expenses.Where Gold Loan lends 75% at LTV, you can also avail Cash against Gold which would be 99% around the actual value.
- Flexible Repayment Options
Gold loans can be repaid in various options. One option is to pay interest via EMIs and the principal amount at maturity. Another option is to repay the entire principal amount and interest at the end of the loan tenure. If a borrower chooses this option, then he/she doesn’t have to pay EMIs. He/she can repay the entire loan amount at the end of the loan tenure.
Furthermore, the borrower can choose the regular EMI option. This option allows the borrower to repay the loan amount via EMIs.
Documents Required to Avail a Gold Loan
- Identity Proof
- Address Proof
Availing a Gold Loan
The process of availing a gold loan can be effortless. You can receive it quickly. Furthermore, it can be used for various reasons. Therefore, in order to reduce the financial burden, you can consider a gold loan.