Is Gold Loan the Best Option in an Emergency?

Gold Loan

A financial emergency is not a new notion, and almost everyone comes to a certain point when some financial aid is required. However, the reasons can be different, some people need it for business expansion, some for education-related expenses, and some for any other personal purpose. In such a scenario, when emergency financial assistance is required, people often resort to loans to get over the crisis. Thankfully, there are a number of financing options available in today’s time, with gold loans being the most popular one.

In India, taking a loan against gold jewelry is an age-old practice. People have been doing it for years to get over a financial emergency, as it is a quick way of arranging funds. In the current scenario, things are slightly different. People used to borrow money from traditional lenders, but now there are a number of financial entities (banks and NBFCs) offering hassle-free gold loans.

Here are a few reasons why a gold loan is considered the best option to handle a temporary cash crunch:

Lower Interest rates

It is a well-known fact that gold prices are constantly increasing. In today’s time, more and more people are getting inclined towards gold loans. One of the biggest reasons is that several banks and NBFCs offer gold loans with low-interest rates and convenient repayment options.

Simplified Processing

Gone are the days when obtaining a gold loan used to be a lengthy and complicated process. Nowadays, applying for a gold loan is extremely simple. All you need to do is submit an application form along with the required documents, get the valuation done for your gold assets, and the loan gets sanctioned within no time. And this can be done in the comfort of your home through the Muthoot Finance Gold Loan at Home facility.

Quick Loan Disbursements

This is another reason that makes gold loans one of the most preferable financing options. Once the application is submitted and the verification is done, there is no need to wait for days or weeks to get the loan amount. At Muthoot Finance, one can get the amount in the shortest time and the loan will be sanctioned.

No Credit History Required

In today’s time, there are a number of financing options available that one can consider to get over a financial crisis. However, most of them require the applicant to have a good credit score. But this is not the case with gold loans. Unlike other loans, you don’t need a credit history in order to avail a gold loan. There is no minimum requirement for credit or CIBIL scores. The loan application approval only depends on the quantity and purity of the gold assets you are going to pledge as they work as a security. The best thing is that you can actually improve your credit score by making all the repayments on time.

Higher Loan-to-value Ratios

In a gold loan, the LTV ratio (also known as the loan-to-value ratio) is much higher as compared to other popular financing options. This means if you need a large sum of money, a gold loan is definitely the best option you have.

Fund Usage Flexibility

Almost every financing option, such as home loans, car loans, education loans, etc., comes with certain restrictions on fund usage. This means that one can use the loan amount obtained only for that particular purpose. However, the case is completely different with a gold loan. One can use the loan funds the way he or she wants. The lending institution does not have any restrictions on the fund’s usage.

Easy Repayment

Repayment is another major aspect of taking out a loan. When you go for a gold loan, you get the flexibility to repay the loan amount at your convenience. At Muthoot Finance, one can choose the loan tenure of their choice and repay the loan. There are several modes of payment as well that one can choose from, such as Google Pay, Paytm, PhonePe, the iMuthoot App, etc.

No Additional Charges

Another reason behind the increasing popularity of gold loans is that they do not come with any additional charges. The borrower only has to pay the applicable interest. At Muthoot Finance, one can avail a loan against gold ornaments, and there are no prepayment charges either. This means that the loan can be repaid before the loan’s tenure comes to an end without incurring any additional fees.

With our gold loan-at-home facility, you can now avail a loan against gold jewellery without having to step out of your house. You can apply for a gold loan online and obtain one at convenient interest rates. Register for a home visit today.