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The Advantages Of The Gold Loan
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A gold loan is where a financial aid in the form a loan is given against gold. Many banking institutional and private finance institutes offer this loan at attractive rates. In this article, we tell you about the advantages of loan against gold.
• Ideal for home owners
In traditional families, especially in the Indian families, gold is a sign of prosperity and wealth, and on special occasions like birthdays and wedding, gold in the form of jewelry, coins, etc are gifted to family members. After the event is over, this gold is normally left lying in the home. Ideally, many individuals would like to use this gold for a financial purpose. It serves as exceptional collateral for individuals who are looking for a quick loan, especially if these individuals are home owners and unemployed.
• Application process
The application process for a gold loan is very simple and does not take much time. When you apply for a loan against gold, you need not supply the institute or private lender with a proof of income or even your credit history. You will only need to submit the basic documents like ID proof and address proof to avail this gold loan. Also the time taken to process this gold loan does not take more than 3 minutes to an hour. Thus, in the case of emergencies, this is an ideal solution to get a loan. Borrowers have an option to pay only the interest during the entire tenure. They also have an option of paying the remaining amount in a single amount at the end of the tenure. Some institutes do have the prepayment penalty policy in place. Thus, it is better to research and look for the banking institutes or private lenders, who will provide you with the suitable loan.
• Interest rates
One of the main advantages of this gold loan is the low interest rates. Normally, the standard interest rates for loan against gold is anywhere from 12% to 16% per annum. If the loan is used for agricultural purposes, the interest rates are normally from 8% to 10%. Most personal loans have an interest rate of 15 to 26% per annum, making gold loans, an ideal solution for a fast personal loan. The gold loan’s amount is normally around 60 % to 80% of the market value of gold at the current market rate. Thus, if you are applying for a gold loan, especially if you are unemployed, this is ideally the best option to get a quick and fast loan.
One must remember that the value of gold is influences by the market pricing; therefore before you start the application process for a loan against gold, you must do a thorough research of the market rates.
Author Bio :- Neha Sharma; a finance student, loves to write about gold loans and loan against gold. She would like to share this information to the public in the hope they can understand and benefit from this information.
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