Blog #Karur Vysya Bank gold loan

About gold loans Gold loans are basically loans that are offered against your gold articles at a fixed interest rate. Even though the interest rates can vary from bank to bank, it usually lies between 7 to 12 percentage depending on the loan tenure. Other than banks, there are financial institutions that specialize in handing out gold loans, some of which are quite famous, like Muthoot Finance Corporation and Karur Vysya Bank Gold Loan. But just like any other service in the market, there are certain myths regarding gold loans as well. The processing fees of such loans can be from 1% to 3% of the loan amount. Gold loans can be acquired for amounts as low as Rs.1500. We will, in this article, try to bust some of these myths.

Myth 1 :- 

Gold loans can be a hassle-inducing process Many believe that gold loans can be a tiresome process including a lot of paperwork and documentation. Truth be told, it is literally the opposite. Unlike normal loans, as you are giving something in return for the money, the process is more of a smoother sail. The loan provider has not got to worry about getting the money back as they have your gold as security, and hence gold loans are easily handed out. Nowadays, on proper documentation being presented, gold loans are even handed out on the spot!

Myth 2 :- 

It has high interest rates Many people may or may not go forward with gold loans thinking the  Gold Loan Interest Rate are low/high compared to personal loans. But gold loans do have varying interest rates, ranging from anywhere between 7% to 26% on average depending on the financial institution. Also, the interest rates depend on your credit score and overall profile.
Myth 3: Only jewelry is accepted against a loan This is a major myth, but the government has provided detailed guidelines which mention that gold articles can also be mortgaged against a gold loan.

Myth 3 :- 

Security concerns Many people opt out of gold loans as they believe it is not safe. But if you choose a legally registered, well-reputed institution, there is nothing to worry about.

Myth 4 :-

Confusion regarding repayment tenure Many customers are misguided about the repayment tenure. The common repayment tenure for the gold loan ranges from 1 to 7 years.

Advantages of a gold loan :- 

The major advantage of a gold loan is that it is instant and can literally be received within hours. Therefore it is especially useful if you urgently need cash in hand. A gold loan is secure and you need not worry about the safety of your gold. The loan to value (LTV) ratio is higher when it comes to gold loans. There are various payment options for customers where either you can pay the interest/principal amount at first or pay via the EMI method.

Conclusion :-

Things to be aware of :- Every financial aid that we can avail from the market has its own upsides and downsides but is always necessary to be educated and informed about the right information regarding the same. Myths that go around can sometimes cause losses to us in the long run. Hence always before seeking financial solutions, make sure that you research very well regarding various options and go forward with the most viable one. Many customers get attracted by the low interest rates and quick transaction speed and jump into it but end up struggling to pay. So while availing gold loan, make sure that you get into one that can be afforded by you, where you can repay the EMI from time to time regularly, as the financial institution has the right to claim ownership of your gold otherwise.

We all know education is a vital aspect of life and everyone should get the right to education. Education is the only thing that can fill the gap of poverty, the gap between a developed and underdeveloped nation etc. Education can imbibe a feeling of oneness and eliminate these stereotypes based on caste, religion, race etc. So, it is very important that each one of us should have the right and privilege of getting an education. But as we know that for availing education one needs to spend money and everyone cannot afford to spend huge amounts of money, so here’s what one can do, they can avail a gold loan for funding their education.

It is a well-known fact that education can be quite an expense in itself as nowadays colleges and schools have a lot of tuition fees, so how should one provide their children with good quality of education, it is simply that one can avail a gold loan for funding their child’s education. One might think of going for an availing education loan, but let me tell you that process can be very tedious and difficult involving a lot of conditions burdening the child and his family. But with a gold loan, this process can be made easier. 

Let us discuss some of the reasons why one should go for a gold loan-

1. It requires no stringent eligibility criteria: Unlike, most education and other loans, the bold loan does not require to follow strict eligibility criteria for availing it. For education loan, many academic criteria are also taken into account in some cases but with a gold loan, it is not the case.
2. No end-use restrictions: In the case of education loans, they do not necessarily cover the tuition fees and other academic-based expenses, especially in the case of students studying abroad, they only cover the extra charges, for example, airfare or travel fare, cost of living, lodging costs, other associated costs etc. but at the same time there are no such restrictions in case of gold loan, they can be utilised without end-use restrictions which add to the advantage.
3. No CIBIL score requirement: For availing an education loan, which the banks provide at a very high rate of interest, the borrower should have a good CIBIL score, and it is very difficult for students to provide a good credit score especially when they don’t have a previous history of borrowing. While, if we look at gold loans and compare the two, gold loans do not require any such CIBIL score for availing loan or fulfil any such criteria, which can be beneficial for students as they can improve their credit score by availing such loan.
4. Minimal documents required: While education loan requires many formalities to be taken care of and many documents to be presented, the gold loan comes in easy, simple and quick as they don’t require any extra documents and formalities to be done, they are very easy to get done with and if everything is correctly presented and taken care of, one can avail a gold loan within one day.

Several other benefits come along with availing of gold loans over education loans. But since they are easy to avail, that does not mean that casualties can be overlooked, one should still be very careful with all their documents, keep in mind the gold loan calculator and check for the Gold Loan Per Gram so that they can compare and then apply for the highest price they get.

When applying for a loan, one should go for the bank that provides the best price with a good interest rate so that you can avail the loan without stressing and Karur Vysya Bank Gold Loan is one such solution to your problems as they provide gold loan interest rate starting from 7% per annum and accept minimum 18 carats of gold. In addition, they provide 75% of the total value of gold to you and provide a flexible tenure. They have very less, transparent extra charges and also net invisible processing charges along with that they provide you with many attractive gold loan schemes.

Also read this: Avail Gold Loan For business Purpose