A few years ago, the only option to avail funds through gold assets was by selling them. However, in today’s time, individuals have the option to pledge their gold articles and obtain a sizable amount as a loan from a lending institution.
Many financial institutions offer gold loans with lucrative benefits and flexible terms. One can opt for a gold loan online by visiting the website of any reputed lending partner. Read on to know how investing in a gold loan is a smart choice.
What Makes Online Gold Loans a Viable Option?
Here are some of the advantages of opting for a loan against gold in India:
Option of “pay interest only”
Financial emergencies come without any warning and leave people in a state of distress. In such scenarios, people usually find it difficult to repay their monthly obligations. Several financial institutions offer a facility where a borrower can opt for paying only the interest component. The borrower can repay the remaining principal amount at the end of the gold loan tenure or during the closure of the loan formalities.
Secured credit facilities ideally have lower interest rates than their unsecured counterparts. This is because the lending institution can easily dispose of the pledged gold jewelry and recover the unpaid dues in case of any credit default.
Fast loan processing
Prompt processing is yet another benefit of gold loans. As lending institutions ask applicants to keep their gold ornaments as collateral, they usually sanction the loan application within a minimum turnaround time. Candidates meeting all the eligibility parameters and pledging high-quality gold can get funds within hours of applying for credit.
Borrowers do not have to worry about the safety of their pledged gold, as the lending institution will be responsible for keeping the gold safe. A lender usually keeps these gold assets safe in a locker or vault, which is comparatively safer than a home. Additionally, lending institutions usually do not charge any extra fee for keeping the pledged gold safe.
No requirement for credit core or income proof
It is not mandatory for an applicant to provide a healthy credit report or income proof while applying for a gold loan. This is because the lender’s money is secured by the borrower’s gold which they can dispose of and recover the outstanding amount in case of a credit default scenario.
No foreclosure or processing fees
Many reputed financial institutions offer gold loans with zero foreclosure and processing fees. Moreover, there are several lenders who even waive the prepayment charges. Cutting down on these costs will allow the borrower to save on the overall payable amount.
How to Apply for a Gold Loan?
After knowing the advantages of investing in gold loans, one must also know the step to opt for this credit facility. Willing borrowers can follow these steps in order to apply for a gold loan in India:
Step 1: Visit the official portal of your preferred lending institution.
Step 2: Locate the gold loan page and click on the “Apply Now” button.
Step 3: Next up, the gold loan online application form will appear on your screen.
Step 4: Fill up this application page carefully with all the details and enter the loan amount you wish to borrow.
Step 5: Provide your PAN details, 10-digit mobile number, and area pin code, and click on “Submit Details”.
Once your lender accepts your gold loan application, a representative from the lending institution will get in touch with you and guide you through the next steps.
To sum it up, applying for a gold loan online is indeed a smart way to obtain funds without hampering the investment portfolio. However, borrowers must always make their monthly repayments on time to keep their pledged assets safe. This will ensure a hassle-free borrowing experience and smooth repayment tenure.