Gold is one of the most valuable yellow metals in India. With the selling gold jewellery price at its best, most people are rushing to gold dealers in the market to get instant cash. Also, it is one of the popular options to get access to credit. If you need cash immediately, you can apply for a loan against your gold items. It is the best option to manage your finances during a cash crunch. Both banks and the financial institution offers gold loans to borrowers.
Depending on the value of your gold jewellery, you can secure a loan as high as Rs. 30,00,000/-. It is worth noting that lenders can offer you up to 70% to 80% of your gold’s value as a loan. The best part is that it serves multiple purposes, which means that the lender imposes no restrictions on the end-use of the sanctioned loan amount. It is the quickest and hassle-free way of accessing funds when you need them.
The perks of applying for a gold loan
Higher loan amount
Your loan amount depends upon the value of your gold in the market. If you are applying for a gold loan, you will need to find out your ornament gold price today. This way, you will know how much value your gold holds and how much you can get as a loan. Most lenders can offer up to Rs. 30,00,000/- as a loan. However, it depends upon several factors, such as your repayment capacity, credit score, current financial obligations, etc.
Easy documentation
Your gold jewellery acts as collateral while applying for a gold loan. There is no need to furnish any other security to the lender. You will not also have to submit lengthy documents to get approval. Your lender may only ask for documents, such as the Aadhaar Card, PAN Card, Passport, and Driving License as proof of identity, address, and age.
Faster processing time
The best part about a gold loan is that you can get approved almost instantly. All you have to do is submit your gold items to your lender and get a loan amount based on your eligibility. Upon submitting your application, you can get loan approval instantly, and the sanctioned loan amount will be transferred to your bank account within hours.
It serves multiple purposes
Another benefit of giving your gold items to get a loan is that you can use the sanctioned loan amount for whatever you wish. It enables to cover the cost of a medical emergency, higher education, wedding, car repair, home renovation, or debt consolidation. The lender will have no restriction on the end-use of the loan amount.
Lower interest rate
Unlike a personal loan, you can avail of a lower interest rate. However, it is worth noting that your gold loan interest rate depends on factors, such as your lender, income, credit score, loan amount, loan tenure, current obligations, etc. While applying for a gold loan, you will need to ensure that you have a stable income with an excellent credit score. This way, you can secure the best interest rate.
Flexible loan tenure
When you apply for a gold loan, you have the flexibility of choosing a loan tenure between 6 to 36 months. It gives you the option to choose a loan tenure based on your needs and preference. However, you must know that your lender will impose higher interest rates if you choose a longer loan tenure. The reason is that lenders consider you a risky borrower and therefore, charge a higher interest rate to justify the risks.
If you have a good income, it is advisable to choose a shorter loan tenure. This way, you can significantly reduce the interest rate and get rid of the financial burden sooner. But, be cautious while taking a gold loan. In the event of no-repayment, you will have to incur higher interest rates, or worse, your lender can auction your gold items to recover the outstanding amount.
Summary
If you need funds now to cater to an immediate financial requirement at home or business, you can apply for a gold loan. Depending on the ornament gold price today and the weight of your gold, you can secure a higher loan amount. Before selling your gold at the best-selling gold jewellery price, make sure to get your gold items valued and hallmarked from a reputed gold store.
Getting a gold loan is the quickest way to access funds. But, since you have to pay the interest rate for getting a loan, make sure you have a stable income.
