People might be in need of funds in any situation, and for that, they turn to different types of loans. Gold loans stand out from the rest as they offer a variety of benefits to the borrower. These benefits include quick disbursals, minimal paperwork, gold safety, and flexible repayment options.
When financial needs arise, selecting the right type of loan is crucial for managing expenses efficiently. Among the many loan options available, gold loans stand out as a practical and accessible choice for many borrowers. These loans offer a host of advantages over other types of loans available. Check out the top benefits of choosing a gold loan and why it is a better alternative to other types of loans:
Make Gold Work for You
Unlike any other loan, gold loans allow borrowers to make use of their assets, i.e., gold ornaments. Individuals can utilise their gold sitting ideal in their locker and take a loan against it. The gold can be useful for funding emergencies like medical crises, educational purposes, personal expenses, and other miscellaneous expenditures.
Get Funds Faster
Since gold loans are secured by gold ornaments, the timeframe to get funds is way quicker than other types of loans. This is one of the main benefits why people prefer gold loans over other types of loans. Borrowers do not have to go through lengthy approval processes or take time to disburse the loan amount.
Once the gold evaluation is done and the required documents are provided, the lender disburses the loan amount right away. This process usually takes a few hours to a day, which is great for those who need the money urgently.
Multiple Repayment Options
One of the biggest benefits of taking a gold loan is the flexible payment options it provides. One can easily customise their repayment structure as per their financial constraints. This type of loan offers options to repay only the interest part every month, keeping the financial burden extremely low. The principal part can be paid partially or in a lump sum at any time during the tenure. The flexibility provided by the gold loan lender allows the borrower to make the right financial decisions and pay back the loan amount at their own pace.
Competitive Interest Rates
Another thing most people consider while taking any kind of loan is the interest rates. Unlike other types of loans, gold loans offer affordable interest rates. This is because gold loans are secured by the pledged gold, and the lender has lower risk, which results in lower interest rates. Lower interest rates mean an overall lesser repayment load for the borrower.
Easy Loan Eligibility
Dealing with elaborate eligibility criteria for a loan can be bothersome for many. This also makes acquiring the loan much more difficult. With gold loans, borrowers get the advantage of easy loan eligibility. Gold loans require minimal paperwork and typically require basic KYC documents. Additionally, a person with a low credit score does not have to struggle to obtain the loan amount.
Gold Safety
By pledging the gold ornaments for gold loans, one can get total gold safety. The lenders keep the assets in a safety vault that is under surveillance around the clock. In a way, the borrower is getting two major advantages, like gold safety and funds during emergencies.
These are some of the main reasons for getting a gold loan rather than any other kind of credit. By using a gold loan calculator, borrowers can gauge the amount they are eligible for and the total payable interest.
