Why GOLD loan always act as a SAVIOR

1. Why GOLD loan always act as a SAVIOR?

2. There are many reasons why someone might need a loan. It can be to invest in a start-up or share market, to purchase a new car or property, students might take it for paying their tuition, or just for other personal reasons. When taking a loan, the person is required to submit something as a mortgage, usually property papers in bank loans. This is to ensure that the lender does not go into loss in case the borrower is not able to pay it back. A gold loan is nothing but a kind of a loan where gold jewels or ornaments are given as a mortgage, and the monetary value of the gold is lent as a loan. The ornaments can be collected back once the loan amount is returned (with interest). Meanwhile, they stay in constant protection of the loan lending company.

3. There are many advantages of taking a gold loan over taking any other loan. Gold loans usually have much lower interest rates than regular loans. There is usually pressure on the borrower by his family to get the family’s gold back as soon as possible due to the possible ancestral significance; hence it makes the lender feel more secure in lending money in exchange for gold jewelry, thus making the loan obtaining process easier. Unlike other loans, the lender does not ask for your credit score or your income proof while giving the loan, reducing the time wasted in getting the documents right. And since the entire process is legally documented, the borrower does not need to fear any theft either, as long as the loan is borrowed from a recognized company. The gold remains secured with the company for no extra charge.

4. Moreover, there is no processing fee in case of a partial return of the loan before the decided time period. The borrower can return a part of the loan money and collect back the equivalent value of the gold ornaments he earlier submitted as a mortgage if needed. Since gold jewelry is worn on certain occasions and at other times is kept in secure locations at home or in a locker, a gold loan gives the option of keeping the gold safe while also getting equivalent money with low-interest rates that can be repaid at any time to collect the gold back. This flexibility makes gold loans a much better option than regular loans. In certain situations, this flexibility of gold loans can even act as a savior for both the borrower and the lender. The lender can sell the gold in case the loan is not paid back, while the borrower can pay back the money to collect his gold at any time as per need.

5. Naturally, the interest rates, the amount of flexibility, and the documentation needed all depend on the money lending company. Still, the points mentioned above are something commonly observed and practiced by companies giving gold loans. Therefore, it can be concluded that when possible, and when the situation needs it, going for a gold loan instead of a regular loan can be a savior

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