It is evident a gold loan is a loan amount that is given against gold. Gold loans are offered by a lot, any nationalised banks, private banks and a lot many financial institutions and these loans are offered to people who avail of the loan against gold at attractive interest rates. Many people avail of a gold loan so that money can be borrowed for a shorter tenure in order to meet the requirements of the children education or some emergency cash crunch in the family. While some people are of the opininon that instead of keeping the gold in the locker, it must be worked out for some added cash.
What are the advantages of a gold loan?
In order to avail for a gold loan you don’t require to show any salary or any income and for that matter one doesn’t even have to get hold of any credit report. This is the sole reason behind unemployed people being able to go for a gold loan.
In clear contrast to any other loans, for availing a gold loan one doesn’t require to submit many papers, just the nominal address proofs and ID proof are more than enough in order to get the loan amount.
The low-interest rates are the main benefit of a gold loan. Usually a gold loan is given at the rates of 12-16 % per year and this si much lower when compared to the interest rates of a personal loan which one can avail of at an interest rate of 15-26% per year.
In rural areas, in exchange for gold, agricultural loan too is granted to every agriculturist at more than nominal rate of interest of 7 to 8 % per year, however in order to avail this loan, proper agricultural documents have to be submitted to the bank.
This is one of the simplest loans because unlike the procedure of other loans when availing a gold loan, you just have to pledge your gold with a bank or any other financial institution and then you can get up to 80% of the market value of the gold as a loan.
There is the option of paying only the interest during the entire term and after the tenure you can actually pay the entire principal amount altogether,
This is the only loan where the banks take just about 2 hours to complete the approval procedure for the gold loan and if we take the nonbanking financial companies into consideration, they at most take a few minutes to complete the approval procedure and one can get his hands on the loan amount almost immediately. Therefore in the case of immediate financial aid a gold loan is the best option.