A loan is a sum of money given out by the lender to the borrower in exchange for a definite repayment in the future along with additional interest rates as well as other financial charges. Before the money is lent, certain terms of agreement need to be met, to which both the parties have to agree. A gold loan, however, is a kind of loan given to the borrower in exchange for gold as a collateral. This gold can be in the form of jewellery, gold bars or even bank issued gold coins. The gold is kept as a security measure by the organization, a guarantee that the amount will be repaid in the near future.
Gold loans are processed for a short duration of time, usually from a month to a couple of years. If the borrower is in need of money urgently and is of the belief that he or she can pay it back quickly then a gold loan is a suitable option.
Benefits of taking a loan against gold
Here is a look at the key benefits of taking a gold loan-
1. Interest rates
The interest rates for a gold loan are markedly lower than that of other kinds of loans. The reason for this is because a gold loan is a low-risk loan option for the lenders since they keep the gold of the customer as a form of security deposit. The interest rates are different depending on how much gold is being kept as the collateral. If the amount taken as the loan is less than half as compared to the actual value of the loan, then the interest rates will be evidently lower. But if the amount is equivalent to the value of the gold then the interest rates will be really high.
2. Quick processing
A gold loan, as opposed to various other kinds of loans, does not require the necessity of
going through the client’s credit score history because the gold serves as the security deposit. Therefore, the processing time for a gold loan is very less.
3. Proof of income is not necessary
Submitting the salary certificate becomes an optional affair in the case of a gold loan. According to a gold loan calculator, you are eligible to apply for one irrespective of the fact whether you are currently unemployed or have a poor credit score record.
Gold is celebrated as a very important means of asset keeping in India. Not only is gold used for important family occasions such as marriage but it also displays the affluence of the family and is generally passed down from generations. Therefore, going for a gold loan policy is a more viable option in India.
Gold loans are processed for a short duration of time, usually from a month to a couple of years. If the borrower is in need of money urgently and is of the belief that he or she can pay it back quickly then a gold loan is a suitable option.
Benefits of taking a loan against gold
Here is a look at the key benefits of taking a gold loan-
1. Interest rates
The interest rates for a gold loan are markedly lower than that of other kinds of loans. The reason for this is because a gold loan is a low-risk loan option for the lenders since they keep the gold of the customer as a form of security deposit. The interest rates are different depending on how much gold is being kept as the collateral. If the amount taken as the loan is less than half as compared to the actual value of the loan, then the interest rates will be evidently lower. But if the amount is equivalent to the value of the gold then the interest rates will be really high.
2. Quick processing
A gold loan, as opposed to various other kinds of loans, does not require the necessity of
going through the client’s credit score history because the gold serves as the security deposit. Therefore, the processing time for a gold loan is very less.
3. Proof of income is not necessary
Submitting the salary certificate becomes an optional affair in the case of a gold loan. According to a gold loan calculator, you are eligible to apply for one irrespective of the fact whether you are currently unemployed or have a poor credit score record.
Gold is celebrated as a very important means of asset keeping in India. Not only is gold used for important family occasions such as marriage but it also displays the affluence of the family and is generally passed down from generations. Therefore, going for a gold loan policy is a more viable option in India.
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