For most of us, when facing a financial dilemma, the first thing that comes to mind is opting for a loan. There are several types of loans available in India. The newest block in the list is the Gold Loans. Now we know gold holds a special emotional connect for most households and taking loans against gold is not considered a preferable option. However, the value of gold is continuously rising, and it makes sense to utilise its power.
In this loan, one has to deposit the household gold in the form of jewellery with the bank or financing agency and get a loan of up to 80 per cent of the value of the gold deposit. The interest rate for gold loans in India is much lower than that of personal loans. To draw a better comparison, we have got a list of the benefits of gold finance.
1) Faster processing:
Banks consider lending against gold as a safer investment. The overall loan processing time for a gold loan is quite less, and you get the approval within a few hours. Banks have the option of selling the gold in case you default in repayment. Therefore, banks usually disburse the loan in few hours.
2) Lower interest rates:
As these loans are secured form of investment, banks charge lower gold loan interest rates as compared to unsecured credit such as a personal loan. The interest rates for a gold loan are generally in the range of 13 to 14% while personal loan interest rates usually start at 15%. Also, if you attach another security as collateral, the gold loan interest rate can be reduced further.
3) Limited repayment woes:
The worst-case scenario in repayment of the gold loan is losing the precious gold. If you are not able to recover your gold loan finance, the bank will take possession of the pledged gold or jewellery to recover its dues. There is no unwanted recovery problem as in the case of unsecured loans like personal loans or loan against property which is claimed through the sale of the property.
4) Bad credit history is not an issue:
Even though you have a bad credit history in the books of account, banks are least concerned when it comes to gold loans. Therefore, if you are in urgent need of funds, try availing gold loans irrespective of bad credit score.
5) Hello Digitisation:
With the advent of digitisation, you can easily apply online for a gold loan instead of visiting the bank. Visit the bank’s official website and calculate the loan amount to borrow on the online gold loan calculators. You can fill the application form available on the site. After submitting the form, bank officials will get in touch with you through call or SMS concerning the application.
In this loan, one has to deposit the household gold in the form of jewellery with the bank or financing agency and get a loan of up to 80 per cent of the value of the gold deposit. The interest rate for gold loans in India is much lower than that of personal loans. To draw a better comparison, we have got a list of the benefits of gold finance.
1) Faster processing:
Banks consider lending against gold as a safer investment. The overall loan processing time for a gold loan is quite less, and you get the approval within a few hours. Banks have the option of selling the gold in case you default in repayment. Therefore, banks usually disburse the loan in few hours.
2) Lower interest rates:
As these loans are secured form of investment, banks charge lower gold loan interest rates as compared to unsecured credit such as a personal loan. The interest rates for a gold loan are generally in the range of 13 to 14% while personal loan interest rates usually start at 15%. Also, if you attach another security as collateral, the gold loan interest rate can be reduced further.
3) Limited repayment woes:
The worst-case scenario in repayment of the gold loan is losing the precious gold. If you are not able to recover your gold loan finance, the bank will take possession of the pledged gold or jewellery to recover its dues. There is no unwanted recovery problem as in the case of unsecured loans like personal loans or loan against property which is claimed through the sale of the property.
4) Bad credit history is not an issue:
Even though you have a bad credit history in the books of account, banks are least concerned when it comes to gold loans. Therefore, if you are in urgent need of funds, try availing gold loans irrespective of bad credit score.
5) Hello Digitisation:
With the advent of digitisation, you can easily apply online for a gold loan instead of visiting the bank. Visit the bank’s official website and calculate the loan amount to borrow on the online gold loan calculators. You can fill the application form available on the site. After submitting the form, bank officials will get in touch with you through call or SMS concerning the application.
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