• May 19, 2023
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Benefits of Taking a Gold Loan in India

Gold Loan Interest Rate

In a country like India, pledging gold assets to borrow money in times of need is not a new concept. People do use their gold ornaments to get over a temporary cash crunch, as it is one of the easiest and fastest ways to arrange some funds. Over the centuries, things have not changed much. Earlier, people used to borrow money from traditional moneylenders against their gold assets, but in today’s time, the process has become more streamlined. Given the popularity of gold loans in India, a number of financial entities offer quick and hassle-free loans at competitive interest rates.

Now the common question that comes to everyone’s mind- is whether a gold loan is a good option or not. The answer to this is that taking out a loan against gold assets can prove to be a smart move, only if one handles it responsibly and makes timely repayment. Lending institutions (banks, NBFCs, etc.) give borrowers the option to pledge their gold ornaments or jewellery. This way, an individual can use his or her idle assets to obtain funds in an emergency and claim them back after loan repayment. One of the major benefits of taking a gold loan is that there is no limit on the number of times the same gold ornament can be pledged.

Let’s dive deeper and discuss a few other advantages of gold loans:

Lower Interest Rates

Due to the constantly increasing price of the precious metal, gold loans are now available at highly competitive interest rates. A lower interest rate simply results in a lower repayment amount, which leads to smaller interest payments.

Easy Eligibility Criteria

The eligibility criteria for availing a gold loan is very simple and easy to meet, with the minimum age requirement and purity of the gold being the main criteria. Any individual who is above the age of 21 years and has a gold asset can apply for a gold loan.

No Income Proof Required

Since it is a type of secured loan where pledged ornaments work as collateral, one does not need income proof or a credit score for this. This is why individuals who may not have a regular income or a good credit history can also avail a gold loan.

High Loan-to-Value Ratio

The higher the loan-to-value ratio is, the higher the loan amount is going to be. The LTV, or loan-to-value ratio, for gold loans, is higher as compared to other popular financing options. This means you can get a loan for a larger amount when you go for this option.

Maximum Rate per Gram

Muthoot Finance for its reliability, accessibility, and high maximum rate per gram, which can provide significant value and financial flexibility to borrowers in need. When compared to other NBFCs and Financial Institutions Muthoot Finance offers one of the best rates per gram even though it depends on rates that may be subject to change based on market fluctuations and other factors.

Gold Loan at Home

Muthoot Finance offers a unique service called “Gold Loan at Home” to make the borrowing process even more convenient for customers. With this service, a representative from Muthoot Finance will visit the borrower’s home to appraise the gold jewelry and offer a loan amount based on its value. The loan disbursement is also done at the customer’s doorstep, ensuring a hassle-free and secure borrowing experience. This service is particularly useful for customers who may have difficulty traveling to a branch location or may prefer the privacy and comfort of conducting the loan transaction at their own homes.

Quick Loan Disbursal

With minimal documentation and a quick turnaround time, gold loans are an ideal option for those in urgent need of funds. This is undoubtedly one of the fastest ways to arrange a large sum of money within a short period of time. Once the loan application is submitted along with all the relevant documents and the gold valuation is done, the loan gets sanctioned in no time.

Multiple End-use Options

One of the best benefits of availing a gold loan is the fund usage flexibility. Gold Loans can be availed for multiple end-use options, such as financing education, medical expenses, business operations, travel, credit card bill payment, home renovation, organizing events, etc. The lending institution does not have any restrictions on how the funds obtained from a loan are being utilized.

Gold Milligram Program

It’s unique and simple. This is a “Gold Milligram Reward” customer reward program in which transactions with the Muthoot Group are rewarded with Gold Milligram reward points. One Gold Milligram reward point equals one 24 ct Milligram Gold coin that can be redeemed after collecting a certain value.

Any of our existing customers who refer a NEW customer to Muthoot Finance / Group (the consumer must be new to Muthoot Finance) will receive 20 Milligram reward points per referral. In the iMuthoot app, the customer can view his or her points. When it reaches 500- milligram points, he or she can go to their Muthoot Finance Branch and fill out a Gold Milligrams Reward Points redemption form. The Branch will make arrangements for the delivery of the Gold Coin.

Security of Pledged Ornaments

While availing a gold loan with Muthoot Finance, borrowers can rest assured about the safety of their assets. The ornaments they are going to pledge will be stored in a secure vault for the entire duration. The best thing is that, in case of any theft, the borrower doesn’t have to bear any losses as the gold is insured.

Flexible Repayment Options

When an individual avails a gold loan with Muthoot Finance, they get complete repayment flexibility. They can either pay off the entire loan in one go or take the monthly interest payment. Other than this, there are several digital payment options, such as iMuthoot App, Muthoot Online, Google Pay, Phone Pe, and Paytm etc. One can choose any mode of payment at their convenience.

No Prepayment Penalty

At Muthoot Finance, gold loans do not come with any prepayment penalty. This means borrowers can repay the outstanding amount and close the loan before the tenure comes to an end without incurring any additional charges.

Muthoot Finance offers various gold loan schemes along with several other financing options. With our loan-at-home facility, you can easily avail a gold loan without having to step out of your house. You can apply online and get your loan sanctioned in no time. Register for a home visit today.

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