Gold acts as a rescue when people face financial problems. Many people keep gold in their home or bank lockers, and they can use gold to meet financial requirements. People need money for their children’s education, marriage, expansion of business, or other purposes. Gold loan is the most flexible and popular. A gold loan is a loan where you pledge your gold in any financial institutions or banks and get the loan amount. It is a secured loan where the gold is taken as collateral by the lenders. A loan is given to the borrowers against gold articles. The borrower has to refund the interest and principal amount in installments or at the end of the tenure period. Fair interest rates are imposed by banks for customers for the gold loan offers.
The procedure of gold loan is simple and varies from one lending institution to another and the best gold loan offers are provided. First, you need to visit the institution with the required proofs or documents and gold articles. The financial institution will evaluate the market value of the pledged gold with tools like EMI, gold loan, GST calculator. They will determine the weight and purity of gold. After checking everything if it seems fine, they will approve the gold loan. The documents required for a gold loan are:
- Identity Proof like Aadhar card or voter car ID
- Address proof
- Signature proof
- Passport size photographs
Here are some benefits of gold loan:
- Low processing fees: Few lenders levy only 0.5-2% as processing fees, while many NBFCs or banks charge zero processing fees on gold loans. The banks keep the gold for a period.
- Interest rates are low: A gold loan is a secured loan and the interest rates charged on it are low as compare to other personal loans. The interest rate varies as it is charge differently by different banks. If the gold loan is required for agriculture, then the interest rate will be quite lesser.
- Income proof is not required: Anyone can request for a gold loan as the loan is given against gold. It is a secured loan in which you are not asked about your income details and you can easily avail loan by pledging gold articles like jewelry. In other loans, borrowers get the loan approval based on their reimbursement capacity and credit record, while in the gold loan, the loan amount is decided on the market value of gold.
- Liquidity: The gold loan is best for raising funds and use them for meeting financial needs and there are no restrictions.
- Quick disbursement: The prominent benefit of a gold loan is the fast processing system. Borrowers can enjoy quick and simple loan disbursement within 10-45 minutes as documentation and other formalities are less. As the gold loan is secured and safest, in case the borrower is unable to pay back the loan the institution can sell the pledged gold.
In the future, if you need money, then you can apply for a gold loan. Customers can also check the website of financial institutions like banks, NBFCs, and register themselves for getting gold loan offers.
