Blog #Gold loan Interest Rate Calculator

A Gold loan is one of the most preferred loans for the Indians because it is given against the quantity of the gold articles you deposit as collateral or security to the bank or the moneylender. The banks and the non-banking finance companies value the gold based on the current prices in the market. The Reserve Bank of India allows a maximum of around 90% of the value of the gold to be disbursed as the amount of loan. The rest of the amount is kept by the moneylender as a margin and can be used in any case of unforeseeable circumstances. Availing of a gold loan is a great idea as it has a lot of benefits. A gold loan has certain features that make it one of the best loans.

Following Are Some Of The Reasons Which Make A Gold Loan One Of The Best Choices To Make In Case Of A Financial Emergency: -

• IT IS SIMPLE AND FAST- A gold loan is one of the simplest and fastest loans that banks offer. The whole process of the loan application of a gold loan is really fast. This is because the documentation involved in a gold loan is minimal, and a person does not have to carry a lot of documents with him as it is in the case of other loans. The documents needed in a gold loan are the KYC documents, which include the identity proof and the address proof.
  
  
  
• IT OFFERS A LARGE AMOUNT EVEN AT A LOW CREDIT SCORE- A gold loan is one of those financial instruments where a person can avail a higher loan amount even if the person has a low credit score. This is because the moneylender keeps the gold that the borrower deposits as security. This is why the banks and the non-banking finance companies are ready to offer higher loans at such low credit scores.
  
  
  
• THE INTEREST RATES ARE ATTRACTIVE- The interest rates on a gold loan are really attractive and flexible compared to the interest rates on the other loans. A person can check the amount of interest with the help of a gold loan interest rate calculator. As the borrower provides the gold to the bank or the moneylender, the risk decreases, and that is why a gold loan is offered at such attractive interest rates.
  
  
  
• THERE ARE FLEXIBLE REPAYMENT OPTIONS- The options of repayment involved in a gold loan are flexible, and it is, no doubt, one of the biggest highlights of the gold loan. A person does not have to pay only the EMIs because there are other options available too that a person can opt for. A person can repay the whole amount of the loan at the end of the tenure, too, with interest rates being paid every month.
  
  
  
• THE TENURE OF REPAYMENT IS LONGER- The tenure of the repayment in a gold loan is also longer as compared to the other loans. Also, the tenure of the repayment cab is extended up to a time period of around 30 months.
  
  
  
• MINIMAL CHARGES- A gold loan is more beneficial as compared to the other loans because of a lot of reasons, as mentioned above. Also, there are no extra charges in a gold loan as there are other loans such as processing charges, foreclosing charges, etc.
  
  
  

A gold loan comes with some of the prominent advantages that are not there with any other loan. A gold loan is considered one of the best loans to look up to when in a financial emergency because the whole process is easy and simple, and there is no need to deposit any income proof. There is also no requirement of having a good credit score or a good repayment capacity as an unemployed person can also apply for a gold loan. Also, the gold loan interest rate in SBI is affordable and reasonable compared to the other rates of interest in a gold loan. 

Also Read:- HOW GOLD LOAN IS DIFFERENT FROM TWO-WHEELER LOANS 

Here are a few reasons it can be used for:-

Uses-

1) Medical bills: Gold loans can help you when you find yourself stuck in numerous medical bills. Medical bills can be as high as the sky. First, try to bring the amount of bills down and talk to the hospital about it. Try asking for instalments as no interest. If nothing works out, go for a gold loan and get your amount within an hour.

2) Student debt: firstly check if the interest rate of your student loan is higher or lower than the Gold loan you are applying for. If the interest rate on the gold loan is lower,than you can pay off your student loan with a Gold loan

3) Repaying friends or family: If you have to repay someone who extended a helping hand when you needed it the most but now you are unable to pay them back, and you are tired of asking friends and family again and again, a Gold loan might be the perfect solution for you. The better option is obviously to talk to them and make them understand your situation. If you still want to pay it back now and want no further wastage of time, go for a Gold Loan. But remember, you'd end up paying extra in this case.

4) Vehicle financing: Try for an auto loan first. If it costs you more, go for a Gold loan. But remember since gold loans are short term loans, you'd have to pay them back in one year in most cases. Use Gold Loan Interest Rate Calculator for accurate and fast computations relating to gold loans.

5) Vacation: people usually take personal loans to finance their travelling, mostly because it doesn't have any bar to its usage and its long term loan. It gives you the time to repay in lower EMI's but their interest is quite high. If you have enough Gold, that by pledging it you would be able to finance your vacation, go for it.

6) Essential home repairs: Obtaining a Gold Loan to fix something essential in your home is logical and sensible.
When you actually need it, go for it. Don't confuse needs with desire. Loan must be taken Only when it's necessary. Also, check to see if repair costs can be covered by borrowing a few funds from the family or relatives.

7) Expensive consumer goods: Computers, kitchen appliances such as fancy refrigerators, furniture etc can be very costly if you actually are a person who wants everything as soon as it is launched. You can buy absolutely anything you want but first, ask yourself, is the thing really that important that I want to finance it with a loan. Can I wait to purchase it?

8) Funeral costs: getting a gold loan for your loved ones last rites is A golden gesture but first see if you can do it with the help of borrowed funds from friends and family.

9) Pets: animal care is no less than human care. The veterinary expenses can be as high as your own medical bills. Sometimes it can get really high if your pet has some serious health problems.  

10) A small business: Gold loans are widely used by small business owners to finance their working capital requirements or to but the inventory. During covid times, it is one of the most availed loan products and was greatly used by small businesses across the country to start, restart or grow their businesses.

However it's essential to check the various costs associated with gold loans before availing one such as processing fees, interest rates etc. Check Muthoot Finance Gold loan interest rate and others here. Any form of loan must only be availed when there is a dire need or no other option for financing.

Must Read:- Benefits and Disadvantages of Gold Loan