What Are The Procedure, Merits And Demerits Of A Gold Loan?
Before taking a gold loan, you must understand everything about it. Read on to know the gold loan procedure, merits & demerits in detail at IIFL Finance.
Throughout life, everyone covers numerous personal or business expenses sooner or later. Either you can cover such expenses using your hard-earned savings or raise external capital and repay it steadily over time. Most individuals prefer the second option as they don’t have to spend much of their savings to cover recurring expenses.If you own gold ornaments, you can easily avail yourself of a loan from a lender. However, before taking a gold loan, you must understand the procedure, gold loan advantages and demerits of a gold loan.
The Process Of A Gold LoanThe gold loan process includes the following steps.
• Choosing A Lender:You need to choose a lender that offers many gold loan options with attractive and affordable interest rates and flexible repayment options.
• Application Form:Fill out the gold loan application form by entering your personal information and completing KYC by submitting the relevant documents.
• Pledge Assets:Once you pledge your gold asset, the lender will analyse the current value of the metal and offer you a certain percentage of the total value as the loan amount.
• Approval and Disbursal:Once the lender successfully reviews the application form, they approve the loan within 5 minutes and disburse it into the bank account within 30 minutes.
Gold Loan Advantages and DisadvantagesThe disadvantages and advantages of gold loans include the following.
• Immediate Capital:A loan against gold offers funds within 30 minutes of application approval into the borrower's bank account, thereby providing quick capital.
• No External Collateral:Unlike other loan products, gold loans do not require pledging a valuable asset such as real estate as collateral. The lender requires gold assets only.
• No End-Use Restrictions:You do not need to justify each expense to the lender. You have complete freedom to use the loan amount for any purpose.
• Fluctuating Prices:Gold prices fluctuate regularly, resulting in lesser value for the gold, higher interest rates and a lower offer as the gold loan amount.
• Security:You have to pledge the gold ornaments as collateral with the lender until complete repayment of the loan. If the lender is not reputed or experienced, you could risk losing your gold to theft.
• Prepayment:The lender may ask you to repay the entire outstanding amount in a single EMI if the value of the gold falls sharply in the domestic market. This factor may increase the chances of default or create a financial burden.
Avail Of An Ideal Gold Loan With IIFL FinanceIIFL Finance is India’s leading financial services provider offering customised and comprehensive gold loans. The gold loan advantages are multiple as you get industry-best benefits through our process designed to offer instant funds based on the value of your gold within 30 minutes of application. IIFL Finance Gold Loans include the lowest charges, making it the most affordable loan scheme available.
Q.1: What are the interest rates on IIFL Finance Gold Loans?
Ans: The interest rates on IIFL Finance gold loans are between 6.48% - 27% p.a.
Q.2: How much time does it take for the disbursal of the loan?
Ans: The loan amount is credited directly into your bank account within 30 minutes after the loan approval.
Q.3: What is the gold loan tenure of IIFL Finance gold loan?
Ans: The loan tenure of an IIFL Finance gold loan is up to 24 months.