The idea of needing money right away is not new, and almost everyone has experienced an unexpected need. As a result, people frequently turn to loans as one of the options for paying for unexpected needs. Both short-term and long-term loans are available.
Personal loans are typically useful for speedy funding approval. The cost of personal loan EMIs has increased in the current environment of rising interest rates. Taking out a loan against your gold in such circumstances might be quite beneficial.
The gold loan interest rate can be lower than a personal loan interest rate. Gold loans are regarded as the most excellent alternative for funding urgent needs like paying for a child’s education, a medical problem, a marriage, etc. You can also use the loan money for an urgent desire to travel or obtain funds for a new company venture. You can obtain these secured loans from financial service providers by pledging your gold as collateral.
A secured loan is a gold loan, commonly referred to as a loan against gold. The borrower obtains this loan from the lender in exchange for the pledge of certain gold items as security. The gold items must be 22-karats. The loan amount is usually up to 75% of the gold’s value based on the gold’s current market worth and quality.
Different lenders charge different gold loan interest rates, from 9.50% to 28%. Comparing the interest rate, processing fee, late payment charges, and pre-payment expenses is advisable before applying for a gold loan.
Why do borrowers prefer instant gold loans in India?
Here are the 5 reasons why Indian borrowers prefer instant gold loans:
- Quick processing and instant disbursal- Gold loans have become one of the most straightforward, secure, and safe financing solutions, particularly when quick cash is needed. This became possible with the development of cutting-edge technology. Today’s online gold loans significantly streamline the procedure.
- Simple eligibility parameters- The requirement for an instant gold loan is relatively permissive compared to other forms of funding. Excellent credit and income documentation are not required. Raising money for essential things like paying for college is simple to do.
- Higher loan-to-value- People require instant access to money in order to receive prompt treatment in the event of a medical emergency. It’s challenging to obtain a significant sum of money at the last minute. Even the cost of products could increase. It is undeniable that using unused gold makes it simpler to raise money. Furthermore, their loan-to-value ratio is high.
Also Read : What Is Loan & How You Can Maximise Your Gold Loan Tenure
- Lower interest rates- Gold loans typically have lower interest rates than other loan types, including personal loans, loans backed by real estate, business loans, corporate loans, etc. The gold loan interest rate is low due to the security provided by gold items. Borrowers may prefer a lower interest rate in times of distress. The total amount of payments is thereby decreased, enabling more efficient debt management.
Easy repayment options- Borrowers have the freedom to make interest and principal payments as necessary with a gold loan. For instance, borrowers may opt to pay only the interest up front and the remaining balance at the end of the loan period. Customers can choose to pay the entire amount in one go, though.