Features and benefits of Gold Loans:
- Lower interest rate
- Faster processing
- Enjoy anytime liquidity
- Option to pay interest only
- Nil processing fee
- No foreclosure charges
- Income proof is not required
- No requirement of credit score
- Safety of gold
- No restriction on the end-use of the funds
1.Lower interest rate
Being a secured loan, gold loans are generally subject to lower rates of interest as compared to other financing options such as personal loan, home loans or other secured loans.
As gold loans are backed by physical gold, it thus involves lenient eligibility criteria and minimal documentation. This enables lenders to process the loan faster.
3.Enjoy anytime liquidity
Gold loans are also termed as ‘ATL’ which means anytime liquidity. This means that you can avail a loan in less than 30 minutes without the need for excessive documents and paper formalities, unlike other financing options. This feature helps you to get an instant loan against gold whenever you require it.
4.Option to pay interest only
Gold loans have a unique feature where the borrower has the option to pay only the interest part during the loan tenure and the principal amount at the time of closing the loan.
5.Nil processing fee
One of the best features of gold loans is that there are no processing charges involved. This makes such loans most preferable one.
6.No foreclosure charges
Unlike other loan options, there are no foreclosure charges or prepayment penalty on paying the loan amount before the loan tenure.
7.Income proof is not required
Financial institutions generally do not ask for any income/salary proof from the applicants as the loan is secured against gold. Therefore, anyone can apply for a gold loan whether you are a salaried or a self-employed individual.
8.No requirement of credit score
Unlike most loans, gold loan approval does not depend on your credit score. In this case, the loan amount is based on the market value of gold. But by taking a gold loan, you can build up a good credit score.
9.Safety of gold
The financial institution offers triple-layered security for gold ornaments that you submit as collateral. Your gold will be kept secured in their vault throughout the time, you will get your gold jewelry back when you repay the loan amount in full.
10.No restriction on the end-use of the funds
Since there is no monitoring of the end-use of the funds availed through this loan, it gives you the flexibility to use the loan to meet any type of expense such as home repairs, higher education, marriage expenses or any medical emergency.
Gold loans are easy to get, but borrowers have to make sure that they repay the loan on time, failing which the gold may have to be surrendered to the bank. Borrowers can take a gold loan from a gold loan company of their choice since the disbursement process is generally quick and easy.