A gold loan is a loan that is taken against physical gold artifacts such as gold ornaments, jewelry, crockery, etc. The entire process involved in securing a gold loan is fairly similar to that of other secured loans.
First, the borrower takes their gold artifacts to the lender. It is necessary for the borrower to carry all the necessary documentation along with the gold articles. There is a certain eligibility criterion in which the loanee must qualify to be eligible for a gold loan. They must either be a farmer, trader, salaried or self-employed professional, or businessman and should be between 21 and 70 years of age. After carefully examining the gold articles to check for their authenticity and after a thorough inspection of the documents submitted, the lender then sanctions a loan to the buyer which is usually a certain percentage of the actual value of the gold. This loan can be repaid by the borrower usually in monthly installments. Upon repayment of the loan amount, the borrower is eligible to get their gold artifacts or ornaments back.
Gold loans have a long list of benefits which makes them a very attractive prospect for any potential loanee.
Low-Interest Rates Gold loans, which are secured loans offer lower Gold loan interest rate as compared to other personal loans, which are unsecured. One can even lower these interest rates further by offering assets as collateral.
Speedy Process For starters, these loans are secured loans. This means that the criteria for eligibility are quite lenient. This results in the rapid processing of these loans. Some online applicants may even get their loans approved in a matter of minutes.
Freedom from proof of income While applying for a gold loan, a loanee is not required to present proof of income. This is especially helpful for unemployed individuals who can equally enjoy the benefits of these types of loans.
Freedom of end-use Gold loans do not place any restrictions on how the money that is borrowed will be used by the loanee. This means that the loanee is free to spend the money at his/her discretion, be it a wedding, a family vacation, educational or tutoring expenses, or healthcare funds. This kind of flexibility in end usage is a remarkable characteristic of gold loans.
Free processing Most of the lenders as well as banks like Manappuram gold loan charge zero fees for processing the loan. This makes it very favorable for any prospective loanee since the expenditure on loan acquisition is minimal to none. Even if some lender does charge a processing fee, it is usually about 1%.
No need for a credit score Most of the banks and lenders approve loans based on whether the loanee has the capacity to repay the loan or not. However, in the case of gold loans, the presence or absence of a credit score does not have any bearing on the approval of the loan.
It is very clear that gold loans are one of the easiest and most secure ways of acquiring a loan. Owing to the uncountable number of benefits, these loans are also one of the most popular types of loans.
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