The gold love of Indian is known to the world. They are the world's leading importers of Silver. Gold is not just the store of interest, it has also seen a decent deal of appreciation in resources over the decade. But do you realize that you will use this gold to finance your immediate cash needs, such as medical expenses, kid schooling, company development, car purchase down payment and family holidays. If you are in a dangerous situation and urgent basis need cash, you can use the ideal gold that lies in your locker to fund the emergency cash requirement. Most banks and financial non-banking firms (NBFCs) offer gold loans. Those loans are one of the easiest and most difficult ways to get instant cash. You can get the gold loan in any shape, be it jewelry, gold coins, bars, and biscuits.
BENEFITS OF GOLD LOAN?
- Faster processing: – Given that the gold loans are backed by physical gold, the bankers are usually more than happy to lend. Gold loans are safe for banks as they have the option of selling the gold in case you default, so banks usually disburse the loan within a few hours. This is due to the lesser processing time.
- Option to pay interest only: – Gold loans have a special feature where the creditor has the option of paying just the interest portion and the principal balance can be charged when the loan is closed.
- Lower interest rate: – Because these are secured loans banks charge a lower interest rate than unsecured loans like personal loans. Interest rates are usually between 13% and 14%, while personal loans typically continue at an interest rate of 15%. Additionally, if you add any asset as leverage, the interest rate on gold loans can be further raising.
- No processing fees: – Many NBFCs and banks do not charge transaction fees as such loans are issued automatically instead of gold kept as leverage with the lender.
- Low or no foreclosure charges: – Most of the borrowers do not demand any premium for advance payment and some of the banks impose a 1% fine for advance payment.
- No-income proof required: – Usually, borrowers will not ask for evidence of profit, because the loan is guaranteed against the gold to hold the bank.
- Bad credit history not an issue: – Unlike other loans where even the loan amount is granted based on the repayment potential and credit background, in the case of gold loan the situation is special. Since the gold is used as collateral, the lenders are not concerned about the principal component and therefore do not verify the borrower's credit history.
- Safety of gold: – The responsibility of gold protection lies with the lender. You don't have to think about it, it should stay secure in its vault. Once you repay the loan you'll get back your gold.
