Gold loans in India have become quite common today. There are a lot of folks availing these loans, especially since there are quite a few dedicated entities doling them out.
Yet, there is a much larger section of society which is largely unaware of gold loans. The objective of this article is to shed some light on gold loans in India so that more folks can go ahead and avail them.
1. Gold Loans in India are One of the Easiest Loans to Obtain
Gold loans are by far one of the easiest loans to obtain in the Indian market. While most other loans require extensive documentation and paperwork, things are very smooth with gold loans. The overall procedural formalities are absolutely minimal.
That is simply because the loan given to you is secured by the gold you provide against it as security. Therefore, being a secured loan, lenders are comfortable with giving out gold loans in India with minimal hassles or formalities.
In fact, gold loans are so easy to obtain, one can walk in and walk out in as little as 10 minutes with funds obtained!
2. Cashing in an Existing Asset
Gold loans should be looked at as a straightforward way to cash in an existing asset. Gold in its existing form, simply lying at home, is clearly not providing you any direct monetary benefit.
By availing a loan against it, you are actually converting an asset already lying with you into real money.
That is the reason, if you have gold lying around and there is an urgent financial requirement, we strongly recommend that you go ahead and avail a gold loan without hesitation.
3. Low Interest Rates
As compared to most other loans, gold loans carry low interest rates. Again, this has a lot to do with the fact that these are loans secured by the gold that you offer as collateral.
With such literally glittering security provided right up front, lenders are happy to charge low-interest rates on the money that they lend to you.
4. Common Prevalence of Gold in India
Statistics commonly indicate that India is one of the highest consumers of gold in the world. Moreover, this consumption is largely by the general populace and not by the government, as is the case with many other countries where gold lies in the form of federal reserves.
In India, gold is considered auspicious and forms a customary part of marriage ceremonies in particular. Irrespective of financial strength and capabilities, you will find gold in one form or the other – especially gold jewelry – as being a central part of Indian weddings.
Clearly, there is a lot of gold lying around in Indian households. All of which can easily be put to effective use with the help of gold loans.
5. Favourable Terms
Gold loans carry some of the most favourable terms for loans in India. For instance:
- There are practically no processing fees that are applied in the case of gold loans. Even if they are applied, they will be as little as 1%.
- Alongside this, there are no prepayment charges. In contrast, most loans carry applicable fees if they are paid off before the tenure of the loan.
- Being secured against the gold which is offered means no income proof is required to avail gold loans.
- For the same reason as in the previous point, creditworthiness in the form of a credit score is not required to avail of gold loans in India.
If there is a genuine urgent financial requirement and you have gold lying idle with you, then it makes complete sense to go ahead and avail a gold loan in India. Especially in light of the “glittering” reasons we have highlighted above. Turning over you gold can be a daunting this, but when you use the money wisely and repay your loan, you will have your gold back and better financial security.