Why Should You Take A Gold Loan
India's savings-prone economy is why its citizens own 11% of the world's total gold reserves. The value of gold is evident from its purchase by people from various economic backgrounds. All important occasions like weddings and festivals are marked with heavy gold purchases. However, you don't have to sell gold for emergency funds anymore. The provision of gold loans is a welcome development in the financing sector for India.
What Is A Gold Loan?
A gold loan is a secured loan that a borrower can take by pledging gold items like gold ornaments. The amount of gold loan is a certain percentage of the value of the gold that a person keeps as security. One can repay the gold loan in installments and get the gold back post repayment.
Why Should You Take A Gold Loan?
1. Lower Interest Rates
Gold loans are available at lower interest rates than personal loans as they are secured.2. Instant Approvals
As gold loans are approved against the gold you possess, the approval process is straightforward and with minimal paperwork.3. Zero Processing Fees
Many NBFCs do not charge processing fee as the loan is available against direct collateral.4. Low Or Zero Foreclosure Charges
The foreclosure charges on the gold loan are as low as 1%. Many NBFCs often do not charge any amount for foreclosure.5. No Credit Score Required
With gold as the collateral in a gold loan, it has little to do with your credit score. If you default, the lender will auction the gold to retrieve the loan amount.6. No Requirement For Proof Of Income
Usually, lenders don't ask for income proof as gold loans are available against the value of the gold.7. Option Of Paying Interest
In gold loans, borrowers can pay interest only during the tenure and pay the principal amount at the time of loan closure.8. Security Of Your Gold
Your gold is safe and insured by your lenders in their vaults. Therefore, you don't have to worry about any theft or loss.Who Should Take A Gold Loan?
• Those who need a loan for a short period / a short-term fund.
• Those who have a low credit score.
• Those who belong to the unorganized sector.
• Those who do not have regular proof of income.
• Those considering taking a personal loan.
People looking to raise quick funds can visit any gold loan provider's website and calculate the amount they will receive as a loan against their gold using the Gold Calculator.
FAQs
Q1. When do I get my gold back?
Ans. When you repay the principal and the interest amount of your gold loan, you get your pledged gold back.
Q2. How to calculate the amount of loan I am eligible for?
Ans. You can calculate your loan eligibility by checking the market price of gold and its purity. Generally, 75-90% of the gold value is given a loan.
Q3. Are making charges considered while the loan amount is calculated?
Ans. The loan amount calculation does not consider making charges. The factors considered include the purity of the gold and its market rate.
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.
