The history of India and gold has been one in the making since ages. To this day, savings as gold is among the most preferred forms of savings in India. Go to any Indian household you are sure to find some form of gold within the house. It could be jewellery, bars, or even billions. But you are sure to find some savings stored as gold.
The advantages of storing money as gold are many. For one, they are not destroyed. Also, it has high liquidity. You can easily trade-in your gold for some quick cash. It can be by selling it in the open market. But selling is a very less preferred option as an attachment to gold is pretty high in India. A better and far more used alternative is a gold loan.
How to avail a gold loan?
As the name suggests, a gold loan is a money in exchange for gold. It is a secured form of a loan with much faster approval as compared to normal loans. It is one of the best ways to procure quick money for those in need. There are several reasons why a gold loan is better than a normal loan. It offers many advantages. Some are
Very easy to apply:
The process to apply for a gold loan is very straightforward. Go to your preferred choice of a lender with ID proof, address proof and the gold. There you have to simply fill up a form and submit xerox copies of documents.
Gold loans can get approved at lightning-fast speeds. Sometimes they get approved within a few hours. This depends on the amount of loan. When you go to a lender, they first evaluate your gold. This will be according to the purity of your ornaments. Then they will approve a loan amount of 70 – 75% as per RBI regulations. If you accept the loan amount offered, you have to sign a disbursal form. Now there are 2 divisions. If the loan amount is below Rs 2 lakh, then you can take cash else to transfer it to your bank. But if the amount is above Rs. 2 lakh then only the option of bank transfer remains.
The credit score does not matter
While you try to banks do not bother about your CIBIL score while approving a gold loan. This is because the gold you deposit secures their investment. Hence the risk undertaken by the lender is very less. They will focus mainly on the purity of the gold you want to deposit.
The high loan amount available
Gold loans are best for any financial emergency. Lenders are willing to offer up to 1 crore when it comes to gold loans. Coupled with the quick disbursal, these loans are best to get your hands on quick money for any emergency.
No usage conditions
Despite being a secured loan, there are no restrictions from the lender. They are happy to give the money and allow its usage for any purpose. You can use the money as per your discretion.
Competitive interest rates
Gold loans score big wins over personal loans in this department. The interest rates are unbelievably low when compared with normal loans. If you need a short term loan, a gold loan should definitely be on your list. The rates usually vary from 12 – 14 %, which seem very attractive compared to other loans.
Customised repayment schedules
Flexible repayment schedules are one of the hot-selling points of a gold loan. The lenders offer a variety of options when it comes to repayment. You may choose to pay in EMIs or a variety of other ways. These include:
- Paying only the interest every month and the principal amount at the end of tenure
- Paying the entire amount with interest at the end of tenure
Extension of the repayment period
Gold loans offer a unique benefit of extension of the repayment tenor. The lender can allow an extension of up to 30 months. But this is not advisable. It is better to pay as early as possible. Extensions will only serve to increase the interest you have to pay.
Safety and security of gold
The gold you deposit is safely stored in storage vaults. This ensures maximum security possible. Hence your gold is safe. Also, the assets are all insured. So in case of any theft, you will get the full value of your gold.
Low charges while applying
A personal loan has a lot of charges. In the case of a gold loan, you have only to pay a minimal processing fee. Many lenders do not take this too. Also, gold loans do not have a foreclosure fee. Hence the cost of applying is much lower than a normal loan.
After looking at all these points, you must now believe why a gold loan is such an attractive option. They outweigh personal loans quite handily. So now choose a lender as per your choice and apply for that gold loan!