A gold loan is an excellent option for the personal loan. It is very easy to apply for gold loan. The lender estimates the amount of gold and reviews the submitted papers. He then sanctions the loan amount as per the market value of gold. You then pay off the principal value along with the interest and get the guaranteed gold back.
These are some of the points of importance of gold loan:
- Convenience- The most accessible of all the loans is a gold loan. This is because in this all you have to do is guarantee your gold with a bank or a private finance institute and the work is done.
- No Processing Fee- Personal Loans require a lot of checking. The banks/lenders need to scrutinize your income proof and your financial standing. They generally charge a processing fee that may vary from 0.5 – 2 percent of the total loan amount. This is not so with Gold Loans, as there is no requirement for income proof. Gold Loan offers online are available with a charge of zero processing fees.
- No income proof required-You don’t require income proof when availing the gold loan. If you avail a home loan, car, or two-wheeler loan from the bank, you must show proof of income. This is not so with the gold loan. It’s almost impossible to get most loans without income proof.
- No tedious and lengthy documentation- In this, no tedious and lengthy documentation is needed in the matter of gold loans, therefore it can be resorted to in times of essential needs.
- Quicker Disbursement- Gold loans are disbursed within an hour of completing documentation formalities, subject to the loan amount, amount, and quantity of gold Jewellery and the documents submitted by the potential borrower.
- No prepayment fees: Unlike personal loans, the borrowers do not have to pay an additional fee for foreclosure of gold loans. This offers great flexibility in terms of how the borrower decides to repay the loan – either in instalment or in bulk.
- Immediate issue of gold loan: Now you can apply gold loans in a quick way to access credit. In most situations, you simply have to take your gold to the gold financier, which would be checked and validated. A few applications to be filled along with KYC records and you can walk out with the capitals in a few hours. This is suitable for both gold financiers as well as banks.
- No credit history required- Banks decline personal loans if the credit score is bad. The same is with most loans like home, car, and two-wheeler loans. You don’t require a good credit score when availing a gold loan as gold is the collateral. As gold loans are given directly in lieu of physical gold and most banks choose to dismiss processing fees.
Conclusion- These above mentioned are the importance of Gold Loan which provides benefits to Gold loan applicants. The benefits of gold loans make the Gold loan more convenient and the best option for raising finance.