For decades individuals have been using gold as a trusted instrument for investment. This yellow metal certainly proves to be a highly liquid asset instrument. It can be quickly sold off for raising the required amount of capital. However, if individuals are not willing to sell this valuable metal, they can opt for a gold loan for procuring funds.
Financial emergencies can take place at any point in time, and a loan on gold is a good bet for meeting an individual’s financial needs.
Reasons why gold loans are best for funding financial needs
Going through the following reasons will provide a deeper insight, supporting the above statement:
Simple application procedure
The procedure to apply for a gold loan is simple. Applicants need not be concerned about a lengthy documentation process. Reputed financial institutions only ask applicants to submit KYC documents to establish their repayment capacity.
The various documents required varies with lenders; however, the common ones are, address proof and identity proof. All applicants can access the entire list of documents needed by reaching out to the concerned financial institution. If the need arises, they may be required to furnish proof of income in addition to required gold loan documents.
Quick disbursal
The speed of disbursal for a gold loan is also straightforward and quick, like the application procedure. Reputed financial institutions use the usual disbursement modes of NEFT/IMPS/RTGS or cash for disbursal.
- Substantial loan amount
Individuals can receive a significant amount of funds through a gold loan. This is one of the reasons why this credit instrument proves to be helpful during financial emergencies.
Since the value of this yellow metal is much higher in markets than any other assets, the amount that can be availed is considerably greater than other mortgage loans. The current market price of this metal is accountable for determining the maximum amount sanctioned by financial institutions.
- Low credit score is acceptable
The value of gold kept as collateral significantly lowers the risks linked with this loan. That is why financial institutions agree to extend gold loans of substantial amounts even to applicants with low credit scores.
Therefore, individuals having a lesser credit score and in need of emergency funds need not worry. They can easily acquire this loan pledging substantial gold.
- Convenient evaluationprocess
Opting for a gold loan from a reputed financial institution like Bajaj Finserv will allow individuals to enjoy an easy evaluation procedure for their valuables. Representatives from the concerned financial institutions will visit the location of the applicant and appraise the jewellery. They will make use of an industry-grade carat meter for doing so. This will account for its accuracy and authenticity.
Easy solutions for repayment
Individuals can select from a broad range of repayment options for a gold loan according to their convenience.
Applicants can opt to pay regular EMIs for clearing the dues. They can also choose to pay the principal at the end of the tenor and interest in a periodic manner. Alternatively, they can choose to pay the principal later and interest up-front.
Complementary gold insurance
Opting for a loan against gold from a reputed financial institution will enable an individual to enjoy a complimentary insurance policy on the gold.
Part-releasing facility and options for part-prepayment
Renowned financers allow customers to partially release their gold items by repaying equivalent amounts. Some of these even allow borrowers to foreclose or part-prepay against nominal to zero charges.
- Zero restrictions on the usage of credit
The capital raised on a gold loan comes with no end-use restrictions. Therefore, individuals acquiring this loan have the liberty of spending or investing the funds anywhere they want to.
Thus, these are the top reasons that make gold loan the best bet for acquiring funds. Keep in mind all of these during financial crunch circumstances.
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