A few years ago, selling gold assets was the only way to access funds from them. Today, people do have the choice to put up their gold items as collateral in order to borrow a significant sum of money from a lending institution.
Gold loans are widely available from financial organizations, often with advantageous terms. Here, we are going to see why findings obtained by gold loan schemes are beneficial.
Why are Gold Loan Schemes a Smart Way to Obtain Funding in Times of Emergencies?
The following are some benefits of choosing a loan against gold:
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“Pay Interest only” Option
People might face distress as a result of unforeseen financial emergencies. Further, they might find it challenging to meet their monthly obligations in such circumstances. Many financial institutions provide a service that allows a borrower to choose to pay simply the interest portion. The remaining principal can be repaid by the borrower either at the conclusion of the gold loan term or when the loan’s formalities are completed.
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Lower Rates of Interest
Secured credit facilities typically offer interest rates that are lower than their unsecured counterparts. This is because, in the event of a credit default, the lending institution can readily sell the gold jewellery that has been pledged and recover the outstanding debt.
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Prompt Processing of Loans
Quick processing is an additional advantage of gold loans. Lending partners typically approve loan applications in the shortest amount of time after asking borrowers to keep their gold jewelry as security. Within hours of submitting the gold loan form, candidates who satisfy all the eligibility requirements and pledge high-quality gold can receive funding.
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Top-Notch Asset Security
Borrowers do not need to worry about the security of their gold pledges because the lending institution will be in charge of doing so. These gold assets are typically kept secure by a lender in a locker or vault, which is a lot safer than a house. Furthermore, lending institutions often do not impose an additional cost for safeguarding these gold articles.
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No Need to Provide Income Verification or Credit History
When applying for a gold loan, it is not necessary for the applicant to have a clean credit report or proof of their income. This is because, in the event of a borrower defaulting on the loan, the lender can sell the borrower’s gold and recover the outstanding amount.
What are The Steps to Apply For a Gold Loan in India?
Willing borrowers must know how to apply for this credit facility after learning the benefits of gold loans. Here are the steps to apt for a gold loan in India:
Step 1: Go to your desired lending institution’s official website.
Step 2: Find the “Apply Now” option on the gold loan page and go there.
Step 3: The online gold loan form will now show up on your screen.
Step 4: Complete this application page completely, including the loan amount you want to borrow.
Step 5: Enter your PAN details, 10-digit mobile number, and pin code, then press “Submit Details.”
A representative from the lending institution will get in touch with you and walk you through the next steps once your lender accepts your application for a gold loan.
In order to get the best terms on gold loans, applicants have to fulfill these eligibility parameters:
- Applicants must be between 21 to 70 years of age
- Both salaried and self-employed workers can opt for a gold loan
- The pledged gold should have a purity of 22K or more
- The applicant must have a decent financial history in order to get a high LTV
In conclusion, applying for a gold loan scheme is a wise strategy to get money without jeopardizing the investment portfolio. However, in order to maintain the security of their pledged assets, borrowers must constantly be sure to complete their monthly repayments on schedule. This will guarantee an easy borrowing process and a seamless repayment period.
