The foremost thing a person does before availing of a loan is to compare the available options. Gold is beneficial not only because it’s cheaper but also as it can be obtained without being a customer of IIFL bank.
In times of a financial crisis or emergencies, it is very tough for daily wage workers or middle-class people to arrange funds on this short notice. Arranging funds is very crucial at that time, but also it seems impossible as well. A Gold Loan can be opted in such times to procure the loss. As an emergency can occur at any time, your gold valuables can come to your aid at such times. This loan is a budget-friendly option as the gold never depreciates over time. Secondly, gold investment never goes in vain due to its demand and multiple benefits. If you observe, the current economic rate of gold has increased tremendously in the last five years.
As there are several options available to opt for, Gold loans are the cheapest amongst them. There are no hidden costs in Gold Loan which makes it a reliable choice amongst borrowers. In comparison with a Personal loan, it has several benefits. Various prospects must be considered before availing of a Gold loan, such as processing fees, interest rates, prepayment options, foreclosure charges, documentation fees, tenure period, and repayment options. One can obtain Gold Loan from any bank without being its member or having a bank account in that particular bank. One should know about the gold loan process in detail before obtaining it to get the best deal. Banks and NBFCs offer various schemes during festive seasons with less interest.
What is the tenure period?
A tenure period is a timeframe in which the borrower has to make the repayments of the debt. As a Gold loan is a short-term loan, the tenure period is six months to 24 months. The tenure period can be chosen as per the total loan amount. A tenure period can be extended during the repayment of the loan.
What is meant by collateral?
A Gold loan is often a collateral-based loan, which means the collateral acts as security towards the loan. In a gold loan, gold value in jewelry, coins, bars nuggets is used as an asset that is secured to avail cash. Banks can offer up to 90% value of Gold's price as a loan. Nowadays, banks have increased their liquidity and are financing a colossal amount of loans. The borrower’s credibility is usually not verified while availing this loan as the gold as it is a valuable asset. Income proof is not required for approval of the Gold loan. Thus anyone, irrespective of their background and income, having 18 carats above gold possession can acquire this loan. If the gold value is worth 15 lakh, then a loan amount up to 12 lakh can be obtained by the borrower.
Repayment of the Gold Loan
Flexible options are given in the Gold Loan for its repayment. Repayment options should be considered before obtaining a loan as it has to be repaid over time by an individual without putting a financial burden. These repayment options have to be chosen as per one’s income and convenience. Other loans have a few repayment options to offer. In contrast, a Gold Loan offers multiple repayment options such as Bullet repayment, overdraft repayment scheme, post-dated cheques, and equated monthly Instalments. One can use an EMI calculator to estimate the repayment amount.
- Bullet repayment scheme- One has to pay interest monthly while the principal amount is due at the end of the loan term.
- Overdraft repayment scheme- One is only charged interest of an amount disbursed by an individual from the total loan amount.
- Post-dated Cheques- A future date check in the name of the bank must be submitted at the nearest branch mentioning barrier details and an indicated repayment amount.
- EMI- Equated Monthly Installments or EMI have to be paid monthly where an equated amount of the total loan amount with incurred interest rate is summed up has to be repaid up to the end of the loan term.
One can choose accordingly as per incomes and repayment ability from the above options to complete debt obligations. Thus, gold-loan/IIFL-gold-loan IIFL Gold loan is the best choice to avail instant cash in emergencies or financial crisis.