Understanding More On Gold Loan
In gold loan, you can avail loan by providing gold ornaments as security to the bank or financial institution. You can avail loan amount up to the institution’s regulations. But you are supposed to surrender your gold till the repayment of principal amount along with interest.
Every lender is trying to come up with an attractive gold loan plan for the borrowers. Earlier, financial institutions and non-banking finance corporations (NBFCs) were issuing gold loans to the public. But as gold loans are feasible for every person, even banks have diversified their lending plans.
There has been increased popularity amongst gold loans because of many reasons such as increase in the gold prices and number of institutions providing it. Borrowers are of the opinion that gold loans are easy to avail, require less documentation and take less time for approval.
We will discuss the features as well as the benefits of gold loan.
If you need money for fulfilling your short-term needs, then you can avail gold loan. You need not worry about the safety of your gold ornaments and jewelry. Your gold will be stored in the vaults of the bank or financial institutions. You do not have to incur other storage expenses such as locker charges. You must feel that your gold is safe with the bank or financial institutions.
For availing gold loan, you are required to approach the institution with minimal documentation. You must provide your identity proof and proof of residence. Yes. You have read it right. You are not required to submit your income statements or tax returns. These are not required. The institution is also not going to check your credit report. It will just verify your documentation and check the authenticity of your gold provided by you. You will be provided with the required gold amount within half an hour upon approval. You also do not have to provide any guarantee or references.
Simple interest loans
You are not required to pay the monthly commitment of EMIs like that of other loans. This saves the interest paid by the borrower. These loans work on the principle of simple interest. You have to commit low. It is absolutely fine even if you are paying only interest for a month. If you fail to pay interest in a particular month, you must pay in the next month.
The gold loans are cheaper with respect to the interest rates charged by the leading banks and institutions.
No debt trap
You are not caught in a debt trap. It means if you are unable to repay the loan amount, then you can ask the bank to keep the gold and terminate the loan obligation. Well, this would be affecting you emotionally. But the crux is that you are supposed to refinance the debt obligation.
Prepayment and repayment
You can prepay the loan when you desire and have surplus funds with you. There are no prepayment charges involved. You can repay as and when you wish. The interest amount also gets reduced as you repay your loan.
So, dazzled by the gold loan features and benefits? So, next time, when you are in need of urgent cash, you can avail gold loan instantly. Provided you have the gold!