Gold is the favorite metal for all Indians. It is bought for myriad reasons; the most common is gold being bought in the shape of ornaments. It is also bought as it is considered as a good investment option and also because it is auspicious to buy gold on certain occasions and festivals. What’s more it considered as a widely accepted gift item too!
Now another feather can be added to the gold cap, it can be used as collateral for a loan too. Thus if your require funds for some purpose and you have gold with you then you can borrow against that gold, the required amount and fulfill your financial requirements.
Why Are Gold Loans Best For You?
Gold loans as is clear from the name and discussion above means borrowing money against gold as collateral. This gold will be held by the lender as collateral. Here are a few reasons why a gold loan is one of the best solutions for you.
Loan can be used for any Purpose:
Gold loans can be useful when you require money for any reason. They are not given for a specific cause, so the borrower can use them for whatever purpose they want. This makes them versatile and very useful just like a personal loan.
Documentation Required is Minimal:
Documentation required when getting a gold loan is minimal. Since they are not for a particular purpose no proof of buying a car or house or getting admission in a particular institute is required as maybe the case in the case of an auto/home or education loan. The borrower may just need to verify the basic KYC details and the lender may ask for proof of income to ascertain if you are in a position to repay the dues or not.
No Credit Check is Required:
Another factor that makes these loans very useful is that no credit check is required to get these loans. The gold is a highly liquid asset and dependable collateral so the lenders are cushioned well against any defaults. If you fulfill the basic criteria that are laid down by the lender then you can get this loan without getting any credit check. Thus for all those who may find it difficult to get a personal loan without CIBIL score, gold loans provide a great option.
Disbursal and Processing is Fast:
Getting a gold loan approved hardly takes any time; it’s almost instantaneous if you fulfill the eligibility criteria. The borrower applies for the loan and submits the gold to the lender who will ascertain its purity and value. After that based on the value of gold that the borrower has kept as collateral the loan amount will be dispersed. The applicants get access to funds within almost no time. For anyone in need of money quickly these loans are very helpful.
Offer A Lot of Flexibility:
These loans offer a lot of flexibility not only in the amount that can be borrowed but also repayment terms and the loan tenure. The amount borrowed depends on the value of gold kept as collateral so the borrower will keep only the required amount as collateral, loan tenure is dependent upon the borrower’s choice and repayment terms are also flexible.
Competitive Interest Rates: Not only is the process to get these loans simple the rates at which they are available is also lower than the rates at which personal loans are available. Generally a gold loan is taken in lieu of a personal loan as just like a personal loan they also can be used for miscellaneous purposes. When interest rates for both are compared, gold loans are available at much lower rates.
If you need funds for various reasons, whether for short term or long term, whether you need a small amount or big amount gold loans are the option to look out for.
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