Financial need has now-a-days become among the most basic needs for the survival and hence it must be managed in a smarter way. Yet there are times when quick funds are needed, like to furnish the newly bought home or for the new startup. The usual and traditional methods are no more efficient for such needs and that’s where the loan is needed and to keep it even secured and safe for both the parties, the idea of gold loan came up.
Gold loan, as the name suggests, is the loan you get against the gold assets you have! Gold is then basically the collateral between the borrower and the bank. This means the bank can seize the collateral, the gold, to adjust the losses, in case the borrower fails to repay the loan amount. This gives a sense of security to both the parties and let them manage the funds better. From the borrower perception, whenever the gold loan is taken from the lender, the borrower can be as less worried about the assets as they want to be since they have the equivalent money against the asset.
Apart from the benefits, there are some other aspects why gold loan is most preferred over other types of loans! Unlike gold loan, other types of loans follow a whole lot of complicated steps in order to pass the loan to the lender since there’s no real transaction among the two parties but just the paperwork. Thus gold loan is a two way transaction and hence is considered to be financially secured over other types of loans.
Also, the gold loan, when applied, takes much lesser time to get passed than other loan products like personal loan or property loans, since gold loan doesn’t need verifications as such. Just the quality of gold and genuine identity of the borrower and the loan is just a few clearings away. SO it’s even quick and can be really helpful in the times of emergency.
Other than the quicker processing, the gold loan interest rate is also much lower as compared to other types of loans. This helps you pay back the minimum possible amount to the back, obviously except the loan amount you have received in collateral. So this is just another advantage when you opt for a gold loan. This helps you keep the financial situation stabilized somehow during the loan repayment. So when you opt for gold loan, you don’t have to worry about huge expenses added but can manage things swiftly. Can’t repay the loan at one go? Many banks now-a-days offer you to pay the loan payment in easy EMIs as well. So your basic expenses can be managed in an efficient way.