Top 10 Benefits Of Gold Loan

A large quantum of Indian households buy gold for religious and auspicious occasions, which they store in bank lockers. However, individuals familiar with the value of gold in the domestic market leverage the gold locked in the bank lockers to take a gold loan and raise adequate funds from lenders such as banks and NBFCs.

Gold loans have become widely popular because of their gold loan benefits. This article details gold loan advantages and benefits of gold loan.

Gold loans include numerous advantages that allow you to cover your expenses without draining your hard-earned savings.

1. Immediate Capital:

A loan against gold offers immediate funds approved  and disbursed after approval into the borrower's bank account.

2. No External Collateral:

Lenders provide the loan amount based on the total value of the gold ornaments without the need for any external collateral.

3. No End-Use Restrictions:

The borrower has complete freedom to use the loan amount without explaining the nature of each expense.

4. Added Liquidity:

Gold loans provide easy liquidity based on an asset otherwise dormant in the bank lockers.

5. Online Process:

The process to apply for gold loan is entirely online and does not require visiting the lender’s official headquarters. The loan application process is simple and quick.

6. Minimal Paperwork:

The application process for gold loans requires minimal paperwork, which saves time and offers quick disbursals.

7. Gold Loan Tax Benefits:

If you use the gold loan amount for home improvement, the construction or purchase of a residential property or as a business expense, you can avail of gold loan tax benefits under section 80C.

8. No Credit Score:

Unlike other loans where a credit or CIBIL score above 750 is necessary to qualify, lenders offer the loan amount without a good credit score.

9. Lower Interest Rates:

Gold loans are secured loan products with comparatively lower gold loan interest rates than other unsecured loans. Low-interest rates ensure that the financial obligations are within the budget.

10. Security Of Physical Gold:

One of the best benefits of a gold loan is the security of the physical gold pledged by the borrower.

The lender keeps the gold in secured vaults and protects it further with an insurance policy against theft. The lender returns the gold to the borrower once they repay the loan completely. Learn More About What Is Gold Loan Exactly Means.