Kartnataka
  • November 24, 2023
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The Golden Safety Net: Understanding the Benefits of Taking a Gold Loan

Gold Loan

In India, gold has always played a prominent role in culture and society. Considered to be a highly auspicious metal, gold is also one of the most popular gifts in celebrations and major life milestones for the people of India. However, the importance of the metal does not end here. It is also one of the safest avenues for investing one’s money, which provides a convenient hedge against inflation as well. Yet another benefit of purchasing gold in the form of gold jewellery, bars, or coins, is that it comes with the option of availing a loan on gold, in situations where one has an urgent requirement of funds to meet urgent financial obligations.

`There are numerous benefits that a gold loan offers to borrowers, especially when compared to other forms of financial instruments like personal loans. To illustrate the advantages that one may avail by taking a loan on gold in times of financial need, here’s all you need to know:

Also Read: Few Things You Should Know Before Applying For A Gold Loan

Easy to Avail

The organised gold loan market has grown exponentially in recent years, which has made it extremely easy for people to avail transparent gold loans. Apart from the easy availability, gold loans also come with minimal eligibility criteria that have no requirement for an applicant to furnish income proof or for them to have a high credit score. Another added benefit is the Loan @ Home facility, likenesses of which are offered by several lenders in the market today. Using this facility, borrowers can book an appointment for their gold loan online or just call 1800 202 12 12 post which they will be visited by a representative from the lender. The entire application, documentation, approval, and disbursal process will be concluded during that visit, allowing for more convenience for people. Getting a gold loan at home significantly adds to the convenience factor of availing loans against the gold one owns.

Get Financial Aid without Having to Sell

Wealth creation via the assets one owns is not an easy task and oftentimes takes years and years for one to collect and own a sizeable portfolio of tangible assets and investments, like gold. Times of financial need should not result in one having to liquefy their assets in a bid to meet pressing requirements. That is why having information about gold loan applications is crucial, as a gold loan is a financial instrument that allows one to utilise the value of the gold that they own to borrow funds without having to sell their assets. Under a gold loan, the gold is pledged as security for the disbursal of the loan amount and for the duration of the loan, the gold assets are securely stored with the lender. Upon repayment of the loan and the interest, the gold is returned to the borrower.

Also Read: What is the Procedure for Muthoot Finance Gold Loan Repayment?

Quick Turnaround Times

The gold that one pledges acts as a guarantee for the lender regarding the repayment of the borrowed amount. So, once the application process has been completed and a valuation of the gold has been performed, it does not take long for the loan amount to be disbursed into the borrower’s account. This makes gold loans a highly feasible option for meeting urgent financial requirements. The application and valuation of the gold also involve very simple processes with minimal documentation, which is also in line with the quick turnaround times of gold loans.

A Viable Option

Opting for a gold loan online is a viable option for all kinds of borrowers, regardless of their financial backgrounds. The fact that there is no minimum income requirement and that one is not required to furnish proof of a regular income or have a good credit score and history makes gold loans a great option, especially for those from the economically weaker sections of society. All one needs is gold to pledge, based on the value of which, the loan amount is also calculated. Gold loans also have a higher loan-to-value ratio, allowing people to avail a loan amount of up to 70%-80% of the current market value of the gold they pledge. Effectively, this means that if a borrower requires a larger loan, they can simply pledge more gold to avail it.

Flexibility for Optimized Utilization

The details of a gold loan vary from scheme to scheme and from lender to lender. Today, borrowers can choose from a variety of gold loan offers to find one that suits their needs perfectly. Apart from the lower processing fee and interest rate, a gold loan also comes with multiple repayment options, making it convenient for borrowers to opt for a gold loan that they can repay with ease. Another plus of availing a gold loan is the lack of restrictions on the end use of the loan amount that is disbursed. This means that the funds one gets under a gold loan can be utilised for any purpose, helping people meet a variety of financial needs. Whether you need money to pay off huge medical bills or you just want to plan a vacation or a marriage, you can conveniently opt for a gold loan.

Given all these benefits, it is easy to see why gold loans are a great option for people. Additionally, the pledged gold becomes the responsibility of the lender for the duration of the loan and is stored in a secure vault which offers borrowers peace of mind regarding the safety of their precious assets. Lenders like Muthoot Finance also gives Free Insurance for the Gold and have advanced 7 layer security to ensure the safety of your Gold.

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