Merits of gold loan
Gold Loan is a loan taken by pledging your jewels. The loan is generally given on ornaments only and not on gold coins. The process of applying for gold loan online is as simple as that for other loans. The borrowers apply online with the set of verification of documents. Once these documents are verified and all the confirmation document is signed, then gold loans are sanctioned.
These are some of the merits of gold loan which is as follows-
- Credit History Assessment- Borrowing via gold loans, people’s credit score doesn’t count. Lending organizations save gold investments as collaterals and do not necessarily bear creditworthiness inspections on applicant’s profiles. Even if an applicant fails to provide installments for their current loans or reimburse a deficit obligation, they can avail of a gold loan.
- Convenience- The most accessible of all the loans is a gold loan. This is because in this all you have to do is guarantee your gold with a bank or a private finance institute and the work is done.
- Hassle-free procedure: To avail the gold loan, very few documents are required since the gold is used as collateral. This makes the application procedure hassle-free.
- No tedious and lengthy documentation- In this no tedious and lengthy documentation is needed in the matter of gold loans, therefore it can be resorted to in times of essential needs.
- High value: Gold is a highly valued commodity in the market, and because of this, you will receive a high LTV (loan-to-value) rate against your gold.
- Quicker Disbursement- Gold loans are disbursed within an hour of completing documentation formalities, subject to the loan amount, amount, and quantity of gold Jewellery and the documents submitted by the potential borrower.
- No prepayment fees: Unlike personal loans, the borrowers do not have to pay an additional fee for foreclosure of gold loans. This offers great flexibility in terms of how the borrower decides to repay the loan – either in installment or in bulk.
- Immediate issue of gold loan: To apply Gold loan is a quick way to access credit. In most situations, you simply have to take your gold to the gold financier, which would be checked and validated. A few applications to be filled along with KYC records and you can walk out with the capitals in a few hours. This is suitable for both gold financiers as well as banks.
- Gold security: Most lenders have tie-ups with reputed banks, who keep the gold in their lockers and vaults through the loan tenure. Lenders also tend to offer a 100% insurance cover on the collateral because of how valuable it is, in terms of market value, as well as the sentiment.
Conclusion- From the above merits it is concluded that Gold is the quickest source of tackling the financial crisis. The abundant availability of assets in the form of gold makes ‘loan against gold’, the most opted source of funds. Gold financing not only helps with the personal financial crisis but also with high urgency business needs.
