Advantageous features of Gold Loans

1. Advantageous features of Gold Loans

2. Gold loans Gold can be used to fund a number of emergency cash requirements, starting from medical expenses, and education of children, to a down payment for a vehicle or setting up a business. A variety of banks and non-banking financial companies (NBFCs) across India provide gold loans today. You can offer gold coins, jewellery, bars and etc, in order to take out a gold loan. There are many advantageous features of such loans, and some of them have been underlined in the following slides.

3. Swift processing As gold loans have physical gold as collateral, financial institutions approve such loans in a pretty hassle-free manner. Lending against gold is a safe option for these institutions as they may sell off the gold in case the borrower defaults. As a result, most banks and NBFCs disburse these loans within just a few hours. It has very little processing time and allows borrowers to enjoy added convenience. Non-secure loans, like personal loans or car loans, may take days or even weeks to get approved.

4. Lower interest rates As gold loans are secured loans, financial institutions charge a much lower rate of interest in comparison to unsecured loans such as personal loans.

5. Less processing fees and foreclosure charges Banks and NBFCs charge very less or even no processing fees on gold loans as they are provided instantly. They also have minimal prepayment charges on such loans.

6. No impact of poor credit history In the case of most loans, the financial institutions grant the loan amount based on the credit history and repayment capability of the borrower. The situation with gold loans, however, is different. As gold is used as collateral for these loans, the lenders are assured about repayment of the principal amount, and therefore do not rely on the credit history of the borrower when granting the loan.