Why Gold Loan Is Mostly Preferred

A gold loan is a type of loan in which the gold is provided to the bank under whose custody it is kept safe. In return, a determined and calculated amount of loan is being sanctioned and approved in the customer’s name and is credited to his bank account. The purity of the gold in the form of the ornaments of the coin must be between 18 to 24 carats which are applicable all over the banks and the different kinds of  NBFCs.

There are different types of financial services available in the market, but if the gold is in the stock of any person, gold can also be used to get financial help. The form of the ornaments and the form of the coin can be used to avail financial help from the financial institutions on certain terms and conditions in which the person is entitled to repay in the form of EMIs.

Fast loan disbursal :

In the case of a personal loan, there is a maximum requirement of 48 hours i.e. 2 to 3 days time. In the case of your car loan, it takes about a week. In the case of a gold loan, it is very much easy. It might happen that if you have an Aadhar Card and gold with you, then there is a possibility that you will get a return with the amount of loan, and that is also within the period of 4 to 5 hours. 

One of the biggest advantages of a gold loan is that the disbursal is much faster than any other type of loan. The applications made are available in the form of the online web, which is much faster, and the documents are not mandatory to be attached or shared by post. Still, they can also be uploaded to the official website by scanning in JPG or PDF format.

No requirement of credit score :

A credit score is that type of score with a three-digit number issued by credit rating agencies. Based on this, the loan providers examine the customer’s profile to judge properly that the person is quite sound or not for providing any kind of loan. The availability of gold loan calculators on official websites can give a better estimation. 

It is generally counted when no collateral security or asset has been made as a backup if there is any kind of default or surrendering of the loan. These are generally used for unsecured loans. Still, in the case of a gold loan, there are no such kinds of risks because if any such things happen, then the banks of the nbfcs have full freedom to resell this particular gold auction is to recollect the amount are the leftover amount which is there.

There is no necessity for income proof :

There is always a requirement of income proof in case of unsecured loans like a personal loan, home loan and other types of loans. Which day becomes really difficult for a person who is not having any source of income or any kind of job. Many people want to have a new start in their life by availing of financial help and applying for a new start-up business, but due to these kinds of financial help options, they are unable to do so, and in those cases, the gold loan comes into the picture. 

Bank Of India gold loan also offers such facilities for the customers. The requirement of the salary slip, form 16, bank account statement etc. and all these kinds of things are not required, but only the proof of address, identity proof and the gold ownership documents is necessary for getting a gold loan.

No involvement of prepayment charges :

In most of the loans and the financial assistance from the Financial institutions, it has been seen that if any loan amount due if has been paid altogether before the expiry of the term, then a charge is being lifted by the bank, and that is called a prepayment or foreclosure charges. 

In the case of a gold loan in most of the bank, it is not followed, which makes it much more flexible, and the customers will also so we saved from the future following monthly interest payments which can be about as sometimes as they are also a bit high. To conclude, we can say that people mostly prefer gold loans due to these reasons.

Must Read:- Important points to know about Gold Loans