Reasons Why Taking a Gold Loan for Financial Needs is a Good Idea

Posted by priya sharma on April 1st, 2021

For Indians, gold is a prime asset due to its high monetary value. As gold ornaments have a great amount of capital appreciation over years, they are seen as a secured asset for availing or providing a loan on. You can easily monetise your gold ornaments at the time of an emergency. A gold loan is a fast and easy way to meet your financial needs. Offered by all major banks and financial institutions, a gold loan is the most secured loan type that you can avail at affordable interest rates. You can find the best gold loan offers from diverse banks. Thus, getting the needed loan sum against your gold coins and ornaments can be a wise decision.

Here are a few best reasons why you should go for a gold loan for your financial needs:

Quick Processing

In today’s fast-paced world, everyone is in hurry and wishes to attain financial support in the fastest possible way. A gold loan can be the best choice for people in need of quick cash. Gold loans are processed in the fastest possible manner. Since gold loans are backed by physical assets, banks and financial institutions give out the loan without any trouble. Also, these loans are safe for banks too as they get the option to sell out the ornaments in case of default. This is the key reason why banks provide such loans within a few hours.

No CIBIL Score or Credit History Required

While other types of loans have strict eligibility conditions such as strong CIBIL score, credit history, and income criteria, gold loan does not have these conditions. You only need to have gold ornaments or coins against which you can apply for the loan. The sum of the loan will be decided as per the purity and value of your submitted gold. In other types of loans, if your credit score is low, the banks often reject loans.

Minimal Documentation

One of the most important reasons to prefer a gold loan is that it has an easy documentation process. You do not need to give an extensive list of documents and wait for weeks to get approval for a gold loan. You just have to provide some basic KYC documents, including passport size photographs, KYC documents or identity proof, and address proof, and get instant loan approval.

Lower Interest Rates

This type of loan comes with lowered interest rates since they are considered the most secured loan as compared to other loan types. Since you will be submitting your gold coins or ornaments to the banks, they have less credit risk while providing you the loan amount. This is the main reason behind low interest rates in this loan type. With low interest rates, gold loans make an affordable option for common people in India. However, it is wise to ask about the jewel loan interest from different banks.

So, these are a few best reasons why you should choose a gold loan for your financial needs. Gold loan is one of the most reasonable credit services that you can use for short-term financial needs or any financial emergencies. Make sure you choose the best bank or financial institution to avail your loan. Also, comprehensive research is always suggested before choosing a gold loan.