As per RBI, lenders provide loans up to a maximum of 75% of the value of gold jewellery. Due to the high price of gold, you get more value on your pledged gold. Due to the physical presence of gold, there is no need for heavy paperwork and credit assessment, which speeds up the loan approval process.
It can be difficult to take a loan at the time of need of money. Looking for other loan options seems to be the only way out when there is an urgent need of cash. This need of cash can be fulfilled with a gold loan.
Gold a safe option for loans
Gold is an important asset due to its stable value and universal acceptance. It maintains stability even in market fluctuations, making it a safe option for loans.
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The stability of gold is the basis of a gold loan and it assures security to both the lender and the borrower. Gold maintains its value over time, providing a reliable security in economic uncertainty.
What does RBI rule say
As per RBI, lenders provide loans up to a maximum of 75% of the value of gold jewellery. Due to the high price of gold, you get more value on your pledged gold.
Due to the physical presence of gold, there is no need for heavy paperwork and credit assessment, which speeds up the loan approval process.
Gold loan can meet all your funding needs. In this article, we are telling about some of the benefits of taking a gold loan –
Advantages of gold loan
Easily available to all
Gold loan is available to more people than traditional credit options. In this, salaried employees, self-employed professionals, or people who do not have a very good credit history can also get a gold loan.
The only condition is that they must have gold to pledge. This flexibility makes gold loans attractive to those who cannot meet the stringent criteria set by traditional lenders.
Flexibility in repayment
A special feature of gold loans is its flexibility in repayment. It gives the borrower the freedom to choose the repayment period as per their financial situation. You can choose short-term or long-term loan repayment plans.
In addition, many gold loan lending companies offer the facility of partial payment or early repayment of the loan without charging heavy penalty. This gives borrowers more financial flexibility.
Low cost and low interest rates
Gold loans usually have lower interest rates than other unsecured loans due to the gold kept as collateral.
Gold reduces the risk for the loan provider, allowing them to lend to borrowers on more flexible terms.
Also, gold loans have fixed interest rates, which provides certainty of repayment and lets you easily predict your financial obligations.
Concerns related to gold loans
The first concern people have when taking a gold loan is whether they will lose ownership and control of their precious asset. It is important to understand that a gold loan does not require you to give up ownership of your gold.
When you pledge your gold for a loan, it is stored safely with the loan provider until you repay the loan in full.
This way, you can rest assured that you will retain the ownership and control of your precious asset throughout the loan tenure.
