7 Benefits of a Quick Gold Loan
Gold stays as collateral with the bank until the loan is completely repaid in full. Today, there are many non-banking financial companies that also offer gold loans. An individual can get a gold loan against your gold possessions such as gold coins, jewellery* etc as per the Banks policy.
In India, Gold carries significant emotional value and is also seen as a potential capital for the future. The gold can also be used during difficult times wherein a loan can be easily availed as compared to other loans. Gold loan is one of the quick and hassle-free way of getting instant cash against gold as collateral.
Here are some of the secret benefits that you might not know about applying for a Gold Loan.
Lower Interest Rates
Unlike personal loans, gold loans are considered as secured loans. For any secured loan, banks offer a lower (competitive) rates of interest compared to unsecured loans. Lower Interest rates result in lower repayment amount, that reduces the financial burden of the borrowers and help them in prompt repayments.
Credit history isn’t taken into consideration
Credit history is considered during assessment for most of the loan products Ex. Personal loans /business loans etc. Banks check your repayment capabilities before offering a loan. But such is not the case with a Quick Gold Loan. Since gold is pledged as collateral, banks and lenders do not consider the credit history of the borrower. This means that you can apply for a gold loan even if you have a poor credit history.
Minimum Documentation required
For processing any loan, supporting documents such as salary history, tax records, income proof etc are to be provided. A business loan requires additional documents apart from the usual list of documents such as profit statements, inventory, turnover and ITR documents. But Easy Gold Loan, on the other hand, requires you to have an account with the bank in most cases and basic KYC details. Banks may ask for supporting documents if any as per their policy
Different repayment schemes
A gold loan can be repaid through different types of schemes depending on the bank/lender and the customer profile. Some banks let you pay the interest amount on monthly/quarterly basis and then pay the principal amount at the end of the loan tenure. Others let you pay the principal amount and interest after one year or let you repay the loan through regular EMIs. Karnataka Bank’s Gold Loan against pledge of gold ornaments offers you options of Term Repayment, Overdraft and Bullet Repayment. For a general gold loan, Karnataka Bank offers repayment on the due date and servicing of interest on a monthly basis.
Instant amount transfer
A gold loan is also called as a Fast Gold Loan because it is one of the quickest ways to receive funds. A Gold loan is extremely useful in times of emergencies where funds are needed instantly in cases such as for paying medical fees, children’s education fees or to meet financial requirements for agricultural purposes, business and personal needs
Higher Loan Value
The loan amount in Unsecured loans, such as Personal Loans is decided based on the credit history of the borrower. So, if your credit history is low, then the loan amount you can avail will also be low and the interest rate will vary depending on the credit history. But gold loans normally have the best Loan-to-Value ratio. The loan-to-value ratio helps identify the value of an asset that has been put up as collateral. The value of gold is usually high, so the loan value that you will receive is also higher. Most banks and lenders usually offer up to 90% of the gold’s value as a loan.
Secured Loan
A gold loan is a secured loan. Secured loans is when you offer an asset as collateral for the loan. Providing gold as collateral gives the banks and lenders an added assurance to offer you a loan. This helps the banks to approve the loan application quickly as compared to other unsecured loans. The Banks/lenders keep the gold that you have given as collateral, safely and securely in their custody. Once the loan is repaid, the gold is returned to the customer.