The gold loan has become one of the most preferred credit instruments for Indians over the past few years. Gold loan is given against the quantity of gold you are ready to deposit with a gold finance company. These gold finance companies value your gold based on the current market prices. RBI allows a maximum of 75% of the gold’s value to be disbursed as a loan against gold. The rest of the amount is kept as a margin in case of any unforeseeable circumstances.
Taking a gold loan to take care of your financial needs is a great idea. The gold loan has a lot of inherent benefits that make it one of the valuable financial instruments. You can also check the various terms associated with the loan using a gold loan EMI calculator online. In this article, we will be discussing five reasons that make gold loans one of the best choices for taking care of your financial needs.
5 Reasons to Choose Gold Loan for your financial needs
Simple and Fast
It is one of the best things about gold loans. The process of application and the speed of disbursal are fast and straightforward. The documentation required is minimal, and you do not need to carry a bulk of documents with you. All you need is to take your KYC documents (address proof and ID proof), PAN Card to the branch of the gold finance company along with the gold that you want to deposit.
Big gold finance companies like Muthoot FinCorp Ltd. disburse the entire amount within a few minutes only, depending on the amount of loan required. Once the financial institution completes the mortgage evaluation, the final amount to be disbursed will be decided. Financial institutions offer an amount anywhere between 70 to 75% of the value of the gold. If the amount is less than Rs 2 lakhs, you also can take the entire amount in cash.
Large Amount at Low Credit Score
A gold loan is one of the very few credit instruments where you can avail a large amount of loan with a relatively lower credit score. The value of gold kept as a mortgage significantly reduces the amount of risk associated with this arrangement. Hence, financial institutions are ready to offer higher loans, even to customers with low credit scores.
The amount that can be availed through a loan against gold is also significantly higher than other mortgage loans as the value of gold is much higher in the markets than any other assets.
Attractive Interest Rates and Flexible Payments
Gold loans are available at much lower rates of interest as compared to any other credit instrument. You can check the final interest rate on a gold loan by using a gold loan EMI calculator online. With gold as collateral, the risk associated with the loan decreases substantially. Hence, the financial institutions are ready to give the loan against gold at much lower interest rates.
The flexibility of repayment is one of the biggest highlights of a gold loan. You don’t need to pay any fixed EMIs, and you can repay the entire loan in small amounts depending on your financial viability during the whole repayment tenure.
Extended Tenure of Repayment
The tenure of repayment of a gold loan can be further extended by up to 30 months. It is also one of the many exciting features of a gold loan, which reduces the stress and burden of repayment on the borrower.
Safekeeping with Minimal Charges
Taking a gold loan has more advantages than you can think of. You are putting your idle asset to work and making sure that it’s safe. The gold that you deposit as collateral is kept in one of the financial institutions’ safest and most secure lockers. Hence, you take care of your financial needs and ensure that your asset is in a safe and secure location.
These are some of the prominent advantages of availing gold loans for your financial needs. Reliable gold finance companies provide you with all the support and assistance you need to make the process of procuring a gold loan smooth and simple.
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