Gold holds a significant value for most Indians. It symbolises property and is essential for rituals and traditions of Indians. None of the celebrations, festivals or weddings is complete in the absence of gold. This precious metal represents a sentimental heirloom and wealth, passed down to the generations ahead. However, during times of financial crisis, gold accumulated over time proves to be quite useful as collateral for gold loans. This article highlights the significance of gold loans and elaborates on why people apply for them.
Understanding A Gold Loan:
A gold loan comes with the gold as collateral and is a secured loan. An online gold loan without bank visit is not ideally possible. When applying for this loan, customers need to pledge their gold ornaments or jewellery and visit the financial institution or bank for the valuation process. Under this loan, the lender provides them with a cash loan up to a specific percentage of the value of the gold.
A gold loan app for salaried individuals lets you unlock the significant value of your gold assets and receive the money quickly. It is a hassle-free process and needs minimal documentation, making it an ideal loan option for fulfilling capital needs or emergency expenses.
Significance Of Applying for a Gold Loan:
Some of the key highlights of choosing a gold loan for covering your financial expenses are as follows:
- Hassle-free approval and disbursement
When compared to other types of loans, a gold loan is an efficient one. A gold loan app for self employed people provides you loan without bringing any challenges, along with smooth disbursement by directly depositing the loan amount into your bank account. However, to avail the loan, you must put your gold ornaments as collateral to the lender. The staff of the lender monitors the value of the goal provided by you, and on the basis of its weight and purity, they suggest the loan amount that you can avail against those ornaments. Once your loan amount is decided, you can submit the needed documents and get the loan funds.
- Impact on credit score
When comparing a gold and a personal loan, credit score stands as the most significant difference point. Generally, when availing a personal loan or any other loan, the lenders monitor your eligibility on the basis of your credit score, as it represents how creditworthy you are. When the credit score is lower than the minimum score needed by the lender, your loan application might be rejected, or you might encounter a high interest rate.
However, when discussing a gold loan, as you provide your gold jewellery or ornaments as security, the lender does not delve deep into your credit history or present credit score. This is because when a borrower fails to repay the loan amount, the lender can sell the pledged gold to recover the amount. Hence, you can also apply via a gold loan app with EMI option to make repayment easy and affordable.
Conclusion:
Now, you might be aware of the reasons why you must apply for a gold loan and how it stands as an ideal loan option for credit to get access to funds when in need. But remember, you must only apply for a gold loan when you actually need funds for emergency expenses, rather than for non-serious reasons.