Whether your objective is to support your child’s education or arrange his/her dream wedding ceremony, to invest in business or fund your long awaited vacation- gold loan is a swift and easy way for bearing instant financial needs at low rates of interest. Why keep your gold ornaments at home or in a bank locker, when you can make the most of this asset by availing a gold loan against it to fulfill your urgent financial requirements.
What is a Gold Loan?
In simple words, gold loan is a secured loan against gold in any form. The gold is returned back to the borrower as and when the repayment of the loan amount is completed. Gold loans are superior to other kinds of loans because of speedy processing and disbursal without requiring any tedious paper work.
Why choose a Gold Loan?
The advantages that you get along with taking a gold loan are quite a lot such as zero hassle and fast processing, zero hidden charges and secured storage of the gold for the loan. Let’s have a quick look at the benefits that a gold loan tags along –
- Gold loans are offered at an interest rate lower than the most others
- Gold loan tenure is flexible. Generally it ranges from a few days to 5+ years
- Minimum gold loan amount is INR ₹1500 without any upper limit
- Pre-payment penalty is absent in case of gold loans
- Nominal documentation
- Credit history is not required
- Disbursement is fast i.e. loan amount is obtained within maximum of a few hours.
- Gold is kept under safe custody
- Gold loans are the most flexible of the lot, something which contributes to its popularity.
Convenient Eligibility Criteria For Gold Loans
‘Easy eligibility criteria’ is another key factor driving the popularity of gold loans. Being an adult who owns gold is enough for you to avail a gold loan. The sanctioned loan amount is dependent upon the value of deposited gold. So, the eligibility criteria reduces down to fulfill the following to obtain a gold loan –
- You must be aged above 18 years
- You must have gold as collateral
Required Documentation for Gold Loan
Talking about gold loan, very little documentation is complementary to the easy eligibility criteria. Unlike other types of loans that require exhaustive documentation, gold loans stand out with only requirement of KYC documentation. To avail a gold loan you have to keep the following documents ready –
- Two passport size photographs
- Identity Proof- voter ID card, driving license, passport, ration card, etc.
- Address Proof- Aadhaar card, telephone bill, electricity bill, telephone bill, other utility bills, etc.
Gold loans are the best fit when emergency fund requirements arise. However, you must not forget that you are getting money in exchange of your gold, which you need to repay along with the interest. If you default on payment of gold loan, your lender might opt for confiscating your gold to make up for the failed repayment. So, going for gold loan sounds great if you keep the consequences in mind!