The gold loan market in India underwent a drastic transformation primarily due to the adoption of technology. It ensures quick loan processing, better gold appraisal, and safekeeping. It is the reason the demand for a loan against gold saw massive growth. Resultantly, the organized gold loan market is expected to reach Rs.4.62 trillion in 2021-22.
Additionally, it is the unique features of a gold loan that enables individuals to opt for this credit to address any financial shortage. Individuals can also maximize the benefits by applying for a gold loan online.
Regardless of, you apply for a gold loan online, or offline the following are some borrower-friendly features that you can leverage to combat any financial shortage.
1. Gold is a liquid asset:
Gold has always been regarded as valuable and used as a mode of transaction for a long time in the past. Even today, the gold reserve of a country somewhat indicates its financial health. Since gold is readily available in most Indian households and is a liquid asset, individuals can opt for this financial product to address any financial need.
2. High loan value:
Depending on the purity and weightage of the gold pledged, individuals can also qualify for a large loan amount. But, borrowers also need to consider the LTV a lender offers. Individuals can qualify for up to 75% of the total value of gold pledged gold articles or the best per gram value gold.
But, it is wiser for individuals to determine the exact credit requirements to avoid under or over-borrowing. They can also use a gold loan calculator and check the largest loan amount borrowers can avail against the gold articles they want to pledge.
3. Zero end-use restrictions:
A gold loan does not impose any end-use restrictions, and thus individuals can use it for diverse financial requirements, including medical emergencies. Selected financial institutions also offer a top-up loan to eligible applicants that can be used for other purposes without any restrictions.
4. Quick processing:
Another reason for individuals to opt for a gold loan online is due to faster loan processing. All they have to do is fill up an online gold loan application form and submit it. Selected financial institutions also offer doorstep facilities that further speed up the process.
With this process, you can complete the loan processing from the comfort of your home. The lender’s representative will visit your home or office and start the whole process of gold appraisal to loan disbursal.
5. Relaxed eligibility criteria:
The gold loan eligibility criteria are easy to meet, and thus lenders take the smallest time to assess an applicant’s credit profile. But, individuals need to meet the eligibility criteria to secure the best gold loan scheme.
For instance, borrowers must fall under the age bracket of 21 to 70 years and be Indian citizens. Other than that, individuals from any profession are eligible for this fund as long as they have gold articles.
But, individuals can also present the necessary documents, including income proof, to improve their eligibility and avail the best gold loan offers.
6. Many repayment options:
Unlike other debts, a gold loan entails flexible repayment options. It allows individuals to plan their financials accordingly. They can choose from the options below:
- Pay interest periodically and principal later before the tenor ends.
- Pay interest upfront and principal later.
- Choose a regular EMI scheme.
Additionally, individuals can also make part-prepayment as and when possible to reduce the interest burden. Use can gold loan calculator offered online to plan your repayment as you like. Leading financiers like Bajaj Finserv do not levy more charges on part payment or foreclosure of gold loans.
7. Affordable interest rates:
Being a secured credit, the gold loan interest rate is affordable and thus does not add major liability to a cash-strapped individual. The interest rates depend on various factors like:
- Gold purity
- Loan corpus
- Current market price
Since this rate varies with lenders, individuals can shop for the best deals by comparing.
8. No impact on credit score:
Individuals often prefer a gold loan over other credit products as lenders strictly check the credit score. It also allows new-to-credit individuals and those with poor credit scores to avail funds during a financial emergency.
Hence, these are some key benefits of a gold loan online that helps individuals raise funds during any monetary shortage. But, before applying, borrowers should read and understand the fine print for better transparency.