A gold loan is a secured loan that has many advantages. Every borrower wants to get the most value of their gold in every way it can only be done by knowing the offering that comes with a gold loan. It is considered a good loan option for short-term money requirements.
The loan is taken by people for many purposes. It can be availed for any legal purpose like education, financing business, or purchasing a property. There are a variety of available loan options. Every loan has its pros and cons. Usually, borrowers go for loans that are suitable for them.
gold-loan/gold-loan-interest-rate Gold loan Interest Rates nowadays are becoming very popular as the borrower always goes through an interest rate and gold loans offer less interest rate. Gradually, people are going toward the gold loan, as they know the advantages that will be required by them.
Some of the factors which help you get the most of your gold loan are:
- Flexible repayment
- LTV rate
- Eligibility
- Lower interest rate
Secured Loan
A gold loan is a secured loan that is usually taken by the borrower by giving their gold to the lender and your gold should be in a range of 18- 24 carats gold. In the case of unsecured loans lenders used to have a high risk of loss but in secured loans, the lenders have the security of the loan in advance.
Flexible Repayment
As a gold loan is a secured loan, so usually lenders offer flexible repayment to borrowers. There are many options of flexible repayment some of them are EMI, Bullet repayment, upfront interest repayment, etc.
EMI is considered the traditional method for repayment. This type of method is used by the other loans also such as personal, educational loans, property loans. Through this method, you have to pay both your principal and interest amount. The amount that is fixed would be deducted from your bank account every month. This method is also good for those who have a regular monthly income.
In the case of the upfront, interest met the od, the borrower has to pay the interest amount at the starting of the loan and the principal amount at the end of tenure, so, you don't need to worry. The bullet repayment method is the most flexible gold loan repayment method that a person can choose. In this you do not have to worry about payment during your tenure, you can pay your principal and interest amount once your tenures are complete.
LTV Rate
LTV is based on borrowers' credit history. Gold loans are the best choice in the case of the LTV rate. Banks can now lend up to 90% of the value of gold ornaments pledged to them.
Eligibility
For a gold loan, you don't need lots of documents like the other loan required. Many loans required the credit history of the borrower but this is not in a gold loan. Even some of the loans require income proof documents so that lenders can check if the borrower had a source from which he or she can repay the amount but in the case of a gold loan there is no need for income proof.
As your gold will be your security that will be in the hands of lenders. The only document you will need would be your Aadhar card, PAN card, address proof, KYC document, your passport size photograph.
From all these unemployed people can also apply for gold loans.
Lowest Interest Rate
A gold loan is a secured loan with a low-interest rate while the interest rate offered by the other loan is relatively higher than that of a gold loan. The interest rate of a gold loan can vary from 9 % to 20 % per annum.
The loan amount is also high in the case of a gold loan. This will be based on the LTV rate. gold-loan/bank-of-India-gold-loan Bank of India Gold Loan also offers the above facility to borrowers.
Conclusion
As we came up with the conclusion that going for a gold loan or other loan one should always go through their advantages and disadvantages. The benefit that every borrower wants may come with a gold loan.