Why Should You Choose A Gold Loan For Emergency?

Gold loan is an attractive loan for emergencies because of its prompt approval. Why should you choose a gold loan for emergency? Read to know!

12 Oct,2022 11:33 IST 159
Why Should You Choose A Gold Loan For Emergency?

Looking for a way out of an emergency financial crunch? Gold loans can help you out!

Gold loans are a smart way to get the amount you need against your gold ornaments or coins. A gold loan is a secured loan offered by financial institutions at an affordable interest rate. But why should you take a gold loan during an emergency? Given below are a few reasons.

Reasons To Take Gold Loan During An Emergency

1. Fast Approval And Disbursal

The gold loan is one of the most attractive loans during emergencies because of its prompt approval and disbursement process.

Since gold loans are secured, they require minimal documentation. Once you complete the KYC process of an institution's emergency loan application, the loan amount is processed almost instantly. Usually, the entire gold loan process takes between 24 and 48 hours to complete.

Contrarily, the financial institution takes a few days to process and verify other financial products before the funds are disbursed.

2. Easy Eligibility Parameters

Compared to other credit instruments, gold loans have relatively lenient eligibility requirements. In this case, prospective borrowers do not need to maintain a high credit score or meet income requirements to obtain funds. However, the borrower’s gold items must meet specific quality standards and fit the required age bracket.

3. High Loan Value

Among the advantages of a gold loan is its relatively high LTV (loan-to-value) ratio, which allows for a larger loan quantity during financial needs. RBI's notification states that one can receive up to 75% of an article's market value as credit. In other words, if you own gold items worth Rs. 10 lakh, you can get up to Rs. 9 lakh.

It's interesting to note that borrowers can increase the gold loan amount by pledging additional collateral. By estimating their requirements, borrowers can apply accordingly. Therefore, they can manage their debt better.

4. Low-Interest Rates

As gold loans are secured, they typically carry a lower lending risk for financial institutions. Hence, lenders can offer a more competitive gold loan interest rate than they would for unsecured loans.

A low-interest rate is always welcome for borrowers, regardless of the funding situation. It lowers the overall debt repayment, facilitating better debt management. Moreover, it doesn't strain the borrower's budget or financial goals.

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5. No End-Use Restriction

The lack of end-use restrictions is the biggest USP of gold loans in emergencies. Borrowers can use these funds for various financial needs. It can be a personal expense, medical emergency, or professional requirement. You do not need to specify the reason for the fund’s need or usage.

6. Repayment Flexibility

The repayment flexibility of gold loans makes them a preferred option for emergency funding. Several leading financiers offer an upfront interest payment in addition to an EMI. Alternatively, borrowers can make one lump-sum payment. Thus, you can prevent payment default by planning and managing your finances.

7. No Income Proof Needed

Gold loans are an excellent emergency credit option since they do not require income proof. In contrast to its other secured and unsecured counterparts, which require borrowers to submit this document, a gold loan lets them skip it to get the needed urgent financial assistance.

Take Advantage Of IIFL Finance Gold Loan Services

Get instant access to gold loans using your gold jewellery with IIFL Finance. To apply for loan, visit the nearest branch or take gold loan at home service. By obtaining a Gold loan from IIFL, you will have access to industry-best benefits and instant funds according to the value of your gold. Unlike lengthy and time-consuming applications by other lenders, our loan application process is customer-oriented, fast, and efficient.

Take advantage of an IIFL Gold loan if you need to raise funds quickly and easily.

Frequently Asked Questions

Q1. How to apply for IIFL Gold Loan?
Ans. To apply for a gold loan with IIFL Finance:
1. Go to IIFL Finance official website. Select the Gold Loan tab.
2. Fill out the form with your current personal information.
3. To process the application, click Submit.
A representative of IIFL will contact you regarding your application. They will also assist you through acquiring a Gold Loan from IIFL.

Q2. What factors affect gold loan rates?
Ans. The purity of gold, loan term, and loan amount affect loan rates.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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