Indians are known for their passion for gold all over the world. India is among the biggest importers of gold in the world. Gold is considered to carry significant value , and is also an investment that could lead to capital appreciation for the future. Many people are unaware that gold can be utilized to pay for cash-flow needs in emergencies like medical expenses for children's education, business set-up and down payment for car purchases, and family holidays.

It is possible to use the gold in your vault at the bank to assist you when faced by a situation that requires immediate cash. Nowadays, many banks and non-banking financial institutions (NBFCs) provide gold loans. These loans can come in handy and are available in a hassle-free manner anytime there is a need to get cash in a hurry. You can obtain gold loan online, which you could have in any kind like gold coins, jewellery or bars of gold.

One of the major benefits of loans against gold are as follows:

Quick Processing - Because gold loans are secured by physical gold, banks as well as other lending institutions are able to quickly approve loans. For banks who lend against gold, it is more secure as they can easily trade the gold in the event that the borrower is in default. These loans are usually disbursed in a matter of hours by banks. This speeds up processing, and thus more convenience for customers.

Pay Interest Only Option - Gold loans usually have a unique option that permits the borrower to only pay interest while paying back the loan. The principal part of the loan may be paid upon the closing of the loan or at the expiration of the loan.

A Comparatively Low Interest Rate Since Loan against Gold are secured loans, banks charge lower interest rates when compared to unsecured loan like personal loans. Rates of interest on gold loans range between 13 and 14 percent. In contrast personal loan interest rates usually range between 15 and 15 percent. For borrowers who can provide additional collateral for their loans, the interest rates are further cut by the lender.

Zero Processing Fees: A lot of banks and NBFCs don't have to charge processing fees for loans made in gold. The bank holds gold collateral in addition to the loan.

Minimal Foreclosure Fees - Many banks and lenders don't charge fees for prepayments for loans in gold.

There is no income proof to be provided - Lenders rarely request proof of income in order to approve gold loan applications. The loan is secured by the borrower's own gold pledge.

There isn't any impact from a bad credit history. Most loans are granted depending on the borrower's capacity to repay the loan amount as well as their credit history. However, this is not the case for gold-backed loans. Since gold is used to collateralize the loan, lenders are sure that the principal component will be paid back and they aren't reliant on credit history.

Lenders are responsible for the safety of gold that is physical. It is typically kept safe in the bank's vault , and therefore, borrowers don't have to worry about it. Once they repay the loan, the gold is returned by the bank.

Conclusion

While gold loans are simple to get, the borrowers must ensure they pay back the loan on time. If this isn't an option, the gold might be forfeited to the bank. Borrowers can take a gold loan from a gold lending company of their choice because the process of disbursement is usually simple and quick.

Posted by: BillHansen at 12:23 PM | No Comments | Add Comment
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