Gold loans are one of the most common borrowing options, especially for people with an urgent need for cash within a short period. The gold loan can allow borrowers to fulfill their emergency financial needs with more convenience as compared to other options. As a gold loan is an asset-backed loan, banks, and financial institutions do not consider CIBIL scores and credit history for approving a loan. The gold loan is an ideal choice for those who have no or low credit score. The gold loan is one of the simplest and quickest ways to get money when you need it. Let’s find out more about this loan solution.
What is a Gold Loan?
A gold loan is a secured loan type availed by those who look forward to meeting their urgent or long-term fund requirements against their gold articles. In the process of opting for a gold loan, borrowers keep their gold as collateral to take money from a bank or NBFC. The amount approved as the loan is a certain fraction of the total price of the gold borrowers have deposited.
Benefits of Gold Loans
- Quick and easy availability
- Lower interest rates
- Minimal documentation and less processing time
- High loan-to-value (LTV) ratio
- Flexible repayment options
- No restriction on the end use of the amount
- Ensured the safety of gold
- No credit history required
How to Apply for a Gold Loan?
- Check the gold loan rate of interest
- Consider the cost associated with your loan
- Check repayment method and loan tenure
- Compare multiple lenders and look for the best offers
- Select a credible lender
How Can You Repay A Gold Loan?
All leading loan providers offer flexible repayment options to help borrowers repay their loans before the tenure period. Some of the repayment options offered by banks and NBFCs include: –
- Partial repayment
- Regular EMIs consisting of both principal and interest amount
- Bullet repayment or repaying the entire amount in one go
- Only interest EMI
- Interest in EMI & Principal at closure
The above points can help you understand everything related to what is gold loan. Make sure you choose the best bank for a gold loan for trusted services.