Gold is considered to carry substantial worth and also a source of prospective capital appreciation for the future. However, not many know that gold can also be used to fund any emergency cash needs like medical expenditures, kids’ education, business structure, down payment for vehicle acquisitions, and even yearly holidays with family. When you face a situation that necessitates urgent cash, you can make use of the gold that is lying indolently in your bank locker. Currently, a lot of banks and non-banking financial companies (NBFCs) offer gold loan eligibility. Knowing about gold loan eligibility can come in handy and can be obtained in a hassle-free manner whenever there is a requirement for immediate cash. You can get a loan against gold that you might have in any form like jewelry, gold coins, gold bars, etc.
What are the advantages offered by gold loans?
Some of the chief benefits of loans against gold are:
- short processing – considering the fact that gold loans have physical gold as collateral, banks and other lending establishments without problems offer such loans. For banks, lending against gold is a more secure option considering the fact that they can without problems sell the gold in case the borrower defaults. As a result, banks tend to disburse such loans inside a depend of a few hours. This results in a lesser processing time and therefore introduced comfort for debtors.
- Comparatively less interest fee – due to the fact that gold loans are secured loans, banks rate a lower interest rate in comparison to unsecured mortgages consisting of private loans. The hobby prices for gold loans vary from 13 to 14%. Alternatively, non-public mortgage interest rates normally vary around 15%. For debtors who can provide extra collateral, the gold mortgage interest rates are further reduced with the aid of the financial institution.
- 0 processing prices – many banks and nbfcs no longer fee any processing charges on the grounds that gold loans are supplied immediately with gold as collateral held by means of the financial institution.
- minimum foreclosures costs – a few banks and lenders either don’t price or have minimal prepayment charges of one% on gold loans.
- no-income proof to be furnished – in most gold mortgage applications, creditors don’t ask for earnings evidence from borrowers because the mortgage is secured towards the gold pledged by way of the borrower.
- no effect of negative credit score history – in most loans, the bank presents loan amounts depending on the reimbursement capability and credit history of the borrower. However, this is not the case with gold loans. Considering that gold is used as collateral, lenders are confident about repayment of the predominant factor and therefore don’t depend upon the credit score records of the borrower earlier than granting the mortgage.
- security of physical gold – the duty of correctly keeping the physical gold is that of the lender. Its miles are generally stored safely inside the financial institution’s vault and consequently, debtors don’t have to fear about the equal. When they pay off the loan, the gold is returned via the financial institution.
