The importance of gold can be seen throughout history. It has had a major role to play in the economies of many nations and kingdoms. Even though gold is no longer considered as a form of currency in today’s world, it is still a reliable long-term investment. Whether in the form of jewelry, coins or bars investing in gold can be helpful when you have an urgent requirement for cash. Applying for a loan through a bank or a reliable Non-Banking Financial Company (NBFC) is one of the easiest ways to avail cash in case of emergencies.
A gold loan is procured by pledging gold in any form with a bank or an NBFC for a short period of time. Since the loan is provided on security, the borrower’s history is not of major concern to the lending firm.
The quality of the gold is the main factor that determines the amount of loan sanctioned by the bank. Compared to the other types of loans a gold loan interest rate is the minimum and could be anywhere between 9.5%-25%.
When To Apply?
Urgent requirement for cash in an unforeseen situation could be easily taken care of by applying for a gold loan. This can be used to meet the money requirements in the following situations.
- A case of a medical emergency
- To start a small scale business
- To fund your child’s education
- To expand a business
- To use as a down payment for purchasing a vehicle or household appliance
- To pay off extra expenses for a wedding or an engagement
- To pay for a holiday with your loved ones and friends
What Are The Advantages?
Gold loans have several advantages over the other types of loans taken to meet the urgent requirements of cash. This is one of the quickest and easiest ways to get cash. The process is quite simple and hassle-free. You get a maximum LTV (Loan to Value) ratio of 75% from banks and NBFCs. A high LTV offers a maximum gold loan per gram. Let’s take a look at some of the major advantages.
- Quick processing of application and disbursal of the loan amount
- Option to pay only the interest on loan throughout the loan period. The principal amount can be paid off completely at the time of loan closure.
- The lowest rate of interest compared to other types of loans
- Most of the banks and NBFCs do not take a processing fee. A processing fee of just 1% on the loan amount is taken by some.
- Proof of income or salary is not required to get a gold loan
- Most of the banks and NBFCs do not charge a penalty for prepayment of the loan. If they do it is only 1% of the loan amount.
- Since gold is used as a security to get the loan the credit history or repayment history of the borrower is not taken into consideration.
- A minimum amount of documentation
- The loan amount gets disbursed in a few hours. Hence, gold loans are the best choice for situations of emergency like a case of hospitalization of a loved one.
- You gold remains safe in the bank vault
Gold loan is the perfect option for financial emergencies. The process is hassle-free and quick and you get the required money in a few hours.
This blog is maintained by the Finaura team. Finaura is a solution that will help you find the best gold loan solution from gold loan company nearest to you. If you have any queries please feel free to contact us. Call us on +91 484 2388285 or email us at [email protected]