How A Gold Loan Can Be Your Best Bet For Short-Term Capital Needs

Gold Loan is one of the best options when it comes to fulfilling your short-term financial needs. Want to know how? Read this article to read in detail.

12 Sep,2022 12:03 IST 125
How A Gold Loan Can Be Your Best Bet For Short-Term Capital Needs

We have access to various forms of loans to meet our short-term cash requirement. This can be a plain vanilla personal loan, credit card debt or other forms of borrowing that require one to pledge some item of value with the lender as a security.

One such type of borrowing is a gold loan. In this, one needs to temporarily mortgage a gold ornament with the lender, who uses it as a security to lend money against it.

The best thing about a gold loan is that more often than not one is just monetising an idle piece of ornament that could be lying for months or even years without use in the cupboard or in the bank locker.

The gold loan offers several benefits that makes it a winner if one compares it to other types of loans, especially unsecured products such as personal loans and credit card debt. In some cases, a gold loan may even be better than a small business loan, if one needs some cash for running or expanding a small-sized business venture.

Here are some factors why a gold loan is the best way to meet short-term cash needs.

Lower Interest Rate And Other Charges

One of the main reasons gold loans are the best form of availing a short-term loan is that these carry a low interest rate compared to unsecured loans such as personal loans or credit card-linked debt. This is because it is a low-risk loan product for a lender.

Moreover, most lenders do not charge anything for processing the gold loan application. Usually, borrowers are not asked to pay anything more such as valuation charges, foreclosure charges and pre-payment charges.

Flexible Ticket Size

One can avail small to large-size loans depending on the weight and purity of gold ornament. While lenders may not be keen for small-size loans against, say shares, a gold loan can be availed for a sum as low as Rs 3,000. This means if one has a small gold ring and needs some cash for an emergency, one can still take a gold loan at competitive rate.

Ease Of Availing, Repaying

Gold loans require minimal documentation, and even people with no previous credit history can avail a gold loan as against a personal loan that is dependent on the credit score.

It is also fairly easy to repay as borrowers can pay back the dues on a monthly, bi-monthly, quarterly, semi-annually or annually. Borrowers also have an option to repay only the interest component while the principal amount can be paid back at the end of the loan period.

Moreover, unlike the past, gold loans can be availed easily sitting at home. The process can be completed online within an hour with door-step valuation and pickup service of lenders.

Conclusion

Gold loans come with several advantages such as a lower interest rate, negligible additional charges, flexibility in repayments and small ticket size. Moreover, even if one doesn’t have a good credit history, one can still take a gold loan. This makes it a perfect choice for short-term needs.

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.

Most Read

Check the Difference Between 24k and 22k Gold
9 Jan,2024 09:26 IST
52450 Views
Like 6243 6243 Likes
Franking and Stamping: What’s the difference?
14 Aug,2017 03:45 IST
46641 Views
Like 7682 7682 Likes
Why Gold Is Cheaper In Kerala?
15 Feb,2024 09:35 IST
1859 Views
Like 4208 1802 Likes
Personal Loan With Low CIBIL Score
21 Jun,2022 09:38 IST
29029 Views
Like 6492 6492 Likes