Why Should You Choose A Gold Loan For Emergency?

Gold loan can be a good option to meet the financial requirement at the time of emergency. Read to know why you can choose gold loan for emergency.

14 Sep,2022 12:29 IST 141
Why Should You Choose A Gold Loan For Emergency?

Debt can be challenging to overcome, even more so if you’re living paycheck to paycheck. Fortunately, there are other ways to get emergency cash than taking an expensive loan from your bank or credit union, and one of those methods involves borrowing money against your gold ornaments.

This article give five reasons why choosing a gold loan in an emergency can benefit you over other options.

Gold Loans Are Secured

When you need a loan quickly, very few financing options are as fast as gold loans. Unlike most loans, there is a minimal to no application process, and you don't need an excellent credit score. This loan is secured by the borrower's gold, which the lender can seize if the borrower defaults on their payments. As long as the borrower doesn't default on their payments, they can keep using their gold for collateral to acquire additional loan amounts.

Gold Loans Include Quick Access To Funds

Gold loans can provide quick access to funds during an emergency. As the loan amount relies on the gold value, there is very little need to follow and application process. This means there's no need for a credit check or waiting periods before you get your money. Gold loans also have flexible terms that the borrower can agree upon with lenders who will talk with you about your financial situation in detail to get the best deal possible.

Gold Loans Have Higher Liquidity

A gold loan offers investors the security of investing their gold and accessing funds when needed. A gold loan could also be a sensible investment for those people looking for something more than traditional investments like stocks or bonds. When you borrow against your gold, you gain liquidity unavailable through other types of investments. If you need money quickly, a gold loan offers one way to do so without selling your physical assets.

Gold Loans Do Not Require Credit Checks

Unlike credit cards, personal loans, or cash advances, gold loans have no credit checks. You simply provide your jewellery as collateral and borrow up to 75% of the estimated value of your precious metal. This funding allows you to tap into liquidity without impacting your current credit standing.

The interest rates are also lower than those for other loans, and you’ll typically get the loan amount within 24 hours. Thus, gold continues to be a multifaceted commodity and the most popular investment avenue among Indians to tackle varying emergencies.

FAQs:

Q.1: What are the advantages of gold loans?
Ans: You can get a higher loan amount with a gold loan as against other types of loans. Thus, you can borrow more for your emergency needs. Unlike credit cards or personal loans, you can use these funds without worrying about high-interest rates.

Q.2: What happens if I cannot repay the gold loan?
Ans: If you have fallen behind on your gold loan payments and cannot continue making them, contact your lender immediately. Usually, they will work out a new payment plan that works for you.

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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