Key Advantages of Taking a Gold Loan

A gold loan is one of the fastest methods to use your idle gold articles and get funds in times of financial need. Gold ornaments, including coins, jewellery, biscuits, etc., can be used to meet emergency financial needs such as medical expenses, business setup, children’s education fees, a down payment of a house or vehicle, or to close a Credit Card loan, etc. Nowadays, many banks and NBFCs (non-banking financial companies) provide gold loans at attractive interest rates. Most of these lenders also deliver gold loan to customers at the privacy and comfort of their own home. By providing attractive interest rates and better rate per gram, these financial institutions take over existing gold loans from other financial institutions. Here are some key advantages of taking a gold loan.

Quick Loan Processing

A gold loan against gold articles can be a great option for people in dire need of cash, as this loan option comes with faster processing, unlike other loan options. The loan amount is provided to you as soon as the documentation process is complete. Nowadays, with a loan at the home facility, you can get a gold loan in just 30 minutes of doorstep service and just one visit to the bank. Since gold loans are given against gold, banks and financial companies disburse the amount very easily. It is also safe for banks as they get the choice to sell out the gold item in case of default. It enables banks and NBFCs to process the loan faster.

No Need for a Credit Score

One of the biggest advantages of a gold loan is that it has easy eligibility criteria compared to other loan types. The approval of the loan amount does not depend on your credit score or history. However, in other loan types, lenders ask loan applicants to show their income proof, credit history, or CIBIL score. Those with low or no credit history get their loan application rejected by financial institutions. It is not the case with gold loans, as a credit score is not required. As the borrowers submit their gold items to the bank, the lender does not ask for credit history. However, the loan amount will be based on the market value of gold.

Attractive Interest Rate

Since gold loans are secured loan types, banks and NBFCs offer attractive and more reasonable interest rates as compared to other loan options. The gold articles you submit to the banks or NBFCs will act as a guarantee against the amount you attain from the bank. So, lenders see no or fewer risks when providing gold loans to individuals.

Safety of Gold

A key benefit of taking a gold loan is that you will be assured the complete security of your physical gold. The leading financial institutions keep your submitted gold items in secured vaults and safeguard them further with a free-of-cost insurance policy against theft. They return the gold items to the borrower once they repay the loan amount.

So, these are some key advantages of gold loans for borrowers. Make sure to select only a reliable bank or NBFC, which can also provide the ease of gold loan takeover, which means you can move your existing gold loan from one bank to another.