7 Must Know Things For A Gold Loan

  Author: Naveen Kumar

In India, for generations, people have bought gold to save for the rainy day. However, even if the rainy day comes, you don’t need to sell the gold. The smarter option of taking a gold loan is available.

In the past few years, gold loans have become very popular in India with many non banking finance companies (NBFCs) and banks offering them, most of them being on the same day. Loan against gold or gold loans, help you avoid costly credit card debt and costly loans like personal loans since gold loan interest rate is lower. You can drive home the advantage of lower rates if you know well the other aspects of gold loans. We tell you about seven aspects of gold loans that you must be aware of.

·      Compared to banks the loan processing is faster with NBFCs. However, banks tend to give higher loan amounts.

·      Being a secured loan in nature, even people with bad credit history can avail this loan and in the process, also repair their credit history.

·      Typically, the loan amount ranges between Rs 20,000 to Rs 20 lakh.

·      Maximum loan amount is capped at 75 per cent of the assessed value.

·      Gold loan is offered only against gold ornaments and coins.

·      These loans have shorter repayment period of up to a maximum of three years.

·      Gold loans offer greater repayment flexibility with options like bullet repayment option. Besides, you also have regular EMI repayment and other options to keep servicing only the interest and pay principal at the end of the tenure.

As you can see, in a financial emergency, you can meet urgent cash requirements by getting a loan against gold.  Like all loans against assets, loans against gold have some distinct features. These features are of great help in raising money from the loans, especially during financial distress and also for people with a bad credit history.

Suggested video 7 Must Know Things About Gold Loans