How A Gold Loan Can Fund Your Dream Vacation

With gold loan availability, your dream vacation is now within reach by using the idle jewelry. Learn how a gold loan can help you fund your dream vacation at IIFL Finance.

22 Dec,2022 12:27 IST 2360 Views
How A Gold Loan Can Fund Your Dream Vacation

Gold has been accumulated as an asset for security in Indian households for centuries, meant to be liquidated and used in times of financial trouble. Over the years, however, the importance of gold as a valuable asset has increased as there are now more options to monetize and use this asset to fund needs other than those in distress, including part-funding a destination wedding or a dream vacation.

With the availability of gold loans, that elusive trip to the white sands of Maldives, the Pyramids of Egypt, or the scenic mountain tops of the Swiss Alps, is now within reach by using the idle jewellery that is locked up in the safe as a latent asset.  

What Is A Gold Loan?

A gold loan is a secured loan obtained from a bank or non-banking financial institution in which the borrower uses their gold in the form of jewellery or gold coins as collateral. 

When the interest and principal are fully repaid, the pledge is released, and the borrower can retrieve their gold.

A gold loan is the easiest and fastest way to secure a loan for any short-term need. It usually requires minimal documentation and has a shorter term ranging from six to twenty-four months.

Advantages Of A Gold Loan To Fund Your Vacation

Quick and Simple:

Gold loans are quick and simple to obtain. There is very little paperwork required, and the loan is quickly disbursed to the borrower's account once the purity of the gold jewellery is established. With the availability of digital gold loans now, the borrower need not step out of his house for the loan. Therefore, an impromptu plan for a vacation can be funded within a few hours.

Lower Interest Rates:

The main advantage of gold loans is that they have lower interest rates compared with other types of credit facilities, such as personal loans and credit card loans. This is due to the fact that a gold loan is a secured loan in which the borrower keeps the gold jewellery as collateral.

At current rates, the interest rate charged typically ranges between 7.15% and 29%, depending on various factors including the tenure of the loan. This is significantly lower than the interest rates on personal loans or credit card debt. Therefore, one can enjoy their vacation with ease without worrying about hefty EMIs in the future.

Furthermore, if the value of gold rises during the loan period, the borrower can sell the gold after the loan has been repaid and profit from the price increase.

No Credit History Is Required:

The borrower's credit history is not required as long as the purity of the gold has been determined. Therefore, a bad credit history or low CIBIL score is not a hurdle for a borrower looking to get a gold loan.

Therefore, even a student with no income planning a solo trip or a housewife looking to fund a family vacation can avail of this mode of funding with ease.

In most Indian households, gold is purchased or gifted at many important and auspicious occasions such as festivals and weddings. However, physical gold generates no interest income while sitting at home or in a bank locker. Individuals and families can now use this to fulfill their travel dreams and gather experiences and memories that hold immeasurable value.

Eligibility For A Gold Loan

A gold loan can be obtained by anyone who owns gold jewellery or coins. While the age requirements vary by lender, the applicant must be between the ages of 18 and 60. 

Also, one must have a valid Aadhaar card, document of identity proof, and document of address proof.

Conclusion

Gold loans have emerged as the fastest-growing personal loan segment due to the ease of getting short-term debt on attractive terms. The requirement for minimal documentation and the quick processing time makes it the most attractive personal credit option.

However, there is a sizable unregulated industry out there made up of neighbourhood lenders and pawn shops. So, it is important to avoid local moneylenders for a gold loan and to choose a trustworthy and branded lender and market leader like IIFL Finance.

People can use gold loans from lenders like IIFL Finance to meet their short-term cash needs. It offers a fully online approach to approve gold loans in addition to having a large branch network all throughout the nation.

Like the majority of lenders, IIFL Finance authorises loans up to 75% of the gold's market value, depending on the grade of the metal.

In addition to providing the best value for the gold, IIFL makes the loan application procedure simple and fast because of its customer-focused approach. Customers can also fill out an online loan application on the IIFL Finance website for instant approval of their gold loan and pay for their dream vacations within a few hours.

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