Why choose a Gold Loan before other loans
Secured and unsecured loans are the two most usable forms of loans. Personal loans are examples of unsecured loans, and they do not enable you to hold your collateral with the bank in return for the funds. All you have to do is include some detail, which varies from bank to bank, and you will be accepted for the loan after a simple check. However, there are specific qualifying standards that must be fulfilled. If you don't, your loan application will be turned down. Defaulting on a personal loan will hurt your credit score, which will impair your ability to repay the money in the future.
People prefer to pay higher interest on personal loans. The market for gold and the rate at which it is exchanged decide the interest rate on a gold loan. The bank allotted to the gold loan should be over 18 carats and in the form of an ornament or a coin. It should also have a distinctive logo. Since there is no debt involved, gold loans do not necessitate as much paperwork as guaranteed loans.
Before deciding about the gold loan, an individual must examine the gold loan per gram rate and the gold value.
Reasons why we choose gold loan rather than other loans :-
- Low-Interest Rate :- The gold loan has the primary consideration of financial cost. A gold loan is that kind of loan which comes with a lower interest rate than most different loans. As you will present your gold to the bank, they will offer a loan amount with a feasible loan repayment tenure.
- Easy and Immediate finance :- Gold loan provides instant finance to its clients. After the application, the verification process begins, and later that the loan amount will transfer to your account according to your necessities. The borrower should go to the bank or upload his/ her KYC documents online, and then he can apply for the application process. The banks or non-banking financial institutes verify the gold articles' weight and purity, and then you will get the loan within a few hours or in a day. Central Bank of India Gold loan is best known for providing quick financial help.
- Higher loan to value ratio :- An individual should be aware that he can borrow the loan amount based on the loan articles. A gold loan can accomplish every need of the person at a lower interest rate. A Borrower can get up to 90% of the market gold value.
- Four repayment methods benefit :- We all knew about the flexible repayment terms in several loans, but there are several as four repayment options in one loan as a Gold loan. If anyone is opting for gold, the loan is rested assured with the ease of repaying the loan amount. These four forms of repayment methods are-
- Interest payment method
- EMI payment method
- Upfront interest payment
- Bullet Repayment methods
It depends on the borrower to select any repayment method as per his preference and convenience.
- Eligibility Criteria :- To get financial help, it is the best method to get a gold loan due to its eligibility criteria. There is no provision for regular credit scores and income cash flows. The Basic requirements for gold loan eligibility include that the borrower should be an adult and have gold items against the amount offered.
- Minimum Documentation :- KYC Documents and two passport size photographs are required to fill the application form. This Documentation process does not require much time to be verified, and hence the loan is processed quicker. Central Bank of India Gold loan offers nil or minimum documentation for processing loan.
Conclusion
Lastly, a person should review the eligibility and gold loan interest rate before deciding as the gold loan offers a lower interest rate to its clients.
Must Read:- Gold Loan as an Emergency Credit
