6 Reasons Why Taking a Gold Loan is a Smart Decision

6 Reasons Why Taking a Gold Loan is a Smart Decision

A gold loan is a credit facility, which allows you to secure your gold jewellery, asset, coins for obtaining funds. Banks, NBFCs, microfinance companies etc offer a gold loan to borrowers from India at a competitive interest rate. In India, almost everyone has a certain amount of gold. This is why a loan against gold is considered as one of the quickest ways to get funds in a short-time. Most of the loans against gold are disbursed the same-day of the loan approval, and this is why, many choose this option to fulfil their monetary requirements.

Do you want to know other reasons of why you should take a gold loan? Read the following post below.

  1. Loan for Many Purposes

Like a personal loan and other unsecured loans, a loan against gold can be used for any purpose. It is not specific for a particular purpose, like a home loan or business loan. The amount you get from submitting your gold jewellery/coin in bank can be utilized for any emergency expenses, such as wedding, medical treatment, big-ticket purchase, travel, home renovation etc. In some instances, the provider may restrict gold loans to specific purposes and professions such as agriculture, industry etc.

  1. Flexibility in Repayment

Are you not interested to pay monthly EMI for your loan, but a lump-sum amount as repayment? If so, then gold loan is a perfect option. There are flexible repayment options in loans against gold. You can opt for only interest amount payment every month and repay the principal amount at the end of the tenure. Some finance companies even give the facility of repaying the amount in parts, in lump-sum. Thus, as per your spending capacity, a repayment mode can be suggested to you.

  1. Short Loan Tenure

A loan against gold is a short-term loan, as the repayment term is between 6 months and 2 years. Many financial institutions may even restrict the tenure up to 12 months. This is because; the loan amount is usually lower than other standard loans. Thus a lengthy tenure is not necessary. Short loan tenure also enables the borrowers to repay faster and save on the interest outgo.

  1. Suitable Loan Amount

Lenders offer as low as Rs. 1,500 as loan against gold. Usually finance companies are prepared to offer Rs. 10,000 to Rs. 50 lakhs as loan, but the amount shall differ according to the gold purity and weight, and eligibility/repayment capacity of the borrower. Thus, those looking for low, moderate, or high loan amount can definitely rely on gold loans in India.

  1. Low Rate of Interest

Rate of interest for a gold loan is lower compared to an unsecured loan. Women customers may even get discounted interest rates, especially if the loan is intended for business and agriculture purpose. Standard rate of interest start at 10.50{b5fea70bec9ef094d9118d829b91d7a1033aae32a2fd766ab739de523e816031} but it may vary as per the individual profile of the customer, gold purity, loan amount, and other factors.

  1. Free Security for Gold

You do not have to worry for the security of the gold ornaments submitted in the financial institution, as these receive surveillance 24×7 under CCTV cameras. The asset is kept in secured vault or room. Most of the providers offer free security for the gold till the loan repayment. Many insure the gold against damages, theft, and other untoward incidents.

The above-given benefits of a gold loan will help you understand why this credit facility is one of the best ways to meet your financial needs.

Category Loans