Gold is a valuable asset for customers facing cash issues. The cash crunch faced by many consumers due to certain issues have led them mortgage their physical gold for instant cash flow. Since, the value of precious metal keeps increasing day by day, gold loans are becoming a popular choice among large number of consumers and businessmen.
Gold loans can prove to be a game changer for consumers facing cash issues during pandemics or emergencies. People facing household issues because of salary cuts and job losses in such circumstances can rely upon the gold loans as they can help them overcome a temporary cash crunch. With the continuous growth in the valuation of gold and lower interest rates, Gold loans are easily available and are comparatively less expensive in compare to personal loans and credit cards which can turn to be a stressful decision for some consumers due to their higher interest rates.
The processing speed of sanctioning of gold loans also proves to be an attractive point. If a person applies for a personal loan, it may take up to 2 days to receive the money and also it requires certain documentation like bank statements, salary slips and many more. On the other hand, approval of gold loan is one of the easiest tasks. You can simply walk in with your gold and after valuation of the gold, the bank will provide you the cash with minimal verifications like KYC documents.
A large number of NBFCs provide attractive services like better gold loan interest rates and larger amount for the pledged gold. The gold loans are usually offered for short period of time like two or three months depending upon the need of the customer. Some banks or companies allows you to pay the interest rates every month and then take the principal amount of the gold at the end of loan tenure. While some other companies accept the total payment of interest amount at the end of loan duration along with the principal amount. The customer needs to analyse all these conditions with respect to their requirements and choose the loan service which suits best for them.
Financial emergencies or crisis can come unannounced to any individual giving them a very little time to make up the arrangements of funds and this situation tests the patience and intelligence of the individual as the loan might help you overcome cash problems but can also backfire if not considered cautiously.
Overall, gold loan can be a good and feasible approach for overcoming financial crisis but the consumers should be aware of certain implications and should make the most out of their gold.
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