It’s common knowledge that gold is among the world’s most valuable commodities. Many people view it not just as a precious metal but also as a potential asset for their financial portfolios. Gold loans are frequently used to pay for unforeseen needs, and numerous trustworthy lenders offer a fast gold loan process for approval along with competitive interest rates for this form of borrowing. In this article, we will discuss whether a gold loan is a viable option to consider this year.
Gold’s Price Has Surged To An All-time High This Year
The value of gold increased as the price of gold hit a record high at the beginning of this year. Use the equity you’ve built up in gold to support a new venture or settle an ongoing financial issue by taking out a loan secured by the asset’s rising value. After the loan amount is repaid and the loan account is closed, the gold is returned in its original, pristine state to its owner. This makes a gold loan the only way to put the value of the gold to good use without really giving up ownership of the gold.
The Gold Loan Process
From the moment you submit your application until the money is sent into your account, the gold loan processing is fast and easy. The borrower is required to put up gold jewellery as collateral with the lender. The gold will be inspected and valued by the lending institution. Loans are typically disbursed electronically to the borrower’s bank account once their value has been determined by the lender.
Getting The Gold Appraised
An essential part of getting a gold loan is having the gold appraised. There are a number of approaches that lenders take to establish the worth of a borrower’s gold collateral. The purity of the gold and its weight are the two most common ways in which its worth is established.
In order to ensure accuracy and transparency throughout the valuation step of the gold loan process, lending institutions use cutting-edge technologies. The procedure can be finished in a matter of minutes, is uncomplicated, and takes very little time. This makes it impossible or very hard for borrowers and lenders to disagree about how much gold is worth.
The Gold Loan Features That Ensure Its Viability
While considering financing options, many people choose gold loans due to their many advantages.
- One of the most important things about gold loans is that they are secured loans, which means that the borrower uses their gold assets as collateral for the loan. This removes the need for borrowers to have a high credit score or a stable income to gain access to loans.
- The loan amount will be a percentage of the gold’s value and may be anything from 60 per cent to 90 per cent of the gold’s value. The loan principal and interest are due on the same date, and the borrower must meet this deadline.
- The lender has something of value in the form of gold to back a gold loan. Because of this, even those with poor credit or no credit history will have a better chance of getting approved for a loan.
- The interest rates on gold loans are typically lower than those on other loan products, making them a cheap method to get access to cash.
- When a gold loan is approved, the money is usually sent to the borrower’s bank account within a few hours.
- Gold loan feature allow you some leeway in repayment, which is a big plus. Borrowers have the ability to select the loan amount, term length, and repayment alternatives that work best for their current and future financial situations.
- The lenders may provide different repayment options, such as a bullet repayment plan in which the borrower pays back the entire loan balance at the end of the loan term or an EMI plan in which the borrower makes equal monthly payments.
- Furthermore, the processing cost for gold loans is relatively low, making them accessible to a wide range of borrowers.
To sum up, taking out a loan against gold is a viable option to think about this year. Gold loans are common among people who need a short-term loan because of the many advantageous features that come with them. The best NBFCs have streamlined the gold loan process so you can get your money promptly. Having your gold evaluated and then pledging it as collateral for the loan typically takes no more than a few hours. Borrowers would have an easier time gaining access to the necessary finances thanks to the extensive branch network that the company maintains across India.