In personal loans, there is no collateral security, and the rate of interest is a little bit higher than that of the other types of loans. It is mainly open with almost all types of financial institutions, that is, a bank or any kind of NBFCs or online lenders. This loan has a unique feature like unexpected emergencies will attract this type of loan where fast services are available. Still, few limitations are also there. Gold loans are the type of loans where the available gold with the form of the coins of the jewelry are available in the banks and upon which the loan amount is credited to the account of the customer. There is no requirement of too many complexities like that of the documentation, like the involvement of paperwork and the risk of collateral security is available.
The first and foremost thing in the gold loan is that there is no requirement for any collateral as per gold price today. Where the gold loan act as the collateral security which the banks are the NbFCs even on not getting a proper response for the further repayment of the installment of the EMI by the customer, having the full right to resell or auction the gold available or placed by the customer to recollect the excess loan amount and whatever the extra amount will be there will be handed over to the customer. It might also happen that the gold rate is the price of the gold fluctuated or changed. During that particular time, even after resetting the gold, if there is any shortfall that rarely happens, the customer will have to pay that specific excess gap amount.
If a person is not employed, there will also be no requirement to present any kind of income proof or any other things which affect the rate of gold. There is no requirement of showing any sort of payslip, bank account statement, or any other thing. The only thing required is the proof of address, proof of identity, and some passport size photographs of the applicant applying for the gold loan. One other thing that is required is the ownership document of the gold. It is necessary to authenticate the actual owner of the gold so that the examination of the gold loan profile can be done quickly.
If we are talking about a loan and there is no credit score, it cannot happen. A credit score is the type of school that states the repayment style and the pattern of the customer or the applicant who has already availed loan earlier and repaid. It is said that a good credit score somewhere scrolls between 650 to 750. A person having a credit score of around 700 is considered a good loan borrower as he will be able to pay as per the record of the previous loans. A person is not having a good source of regular income each and everyone will find it difficult to pay the loan on the other types of loans as there will be the requirement of the credit score where the loans can be availed only on showing the performance of the past loans already paid in what manners and pattern. There is no requirement of the credit score because the gold itself is collateral security here.
Conclusion
In conclusion, we can say that all people can't have an employment status when a person is having a minor age or is leading a student life and requiring an emergency need of good financial help for retired personnel. In such cases, the gold available in the house after mutual understanding among the family members can lead or make use of it to meet the requirement to go forward in life.