People mostly get stuck with the personal reasons of expenses like helping any family member but not having enough balance left in the salary at the month-end. There might be some educational needs due to which an exam application form is left every time due to lack of financial support. There might be some courses which a person after college needs to be trained into himself by taking admission in a training institute to get a renounced job in a good company. There might be some requirement for medical treatment due to the sudden happening of an accident. Else would have been met with the accumulated amount of savings or the mediclaim if done at the right time.
Gold loan is having an extensive range of customers. The reason behind the facts is that the gold loan is the form of loan where the gold available with a customer is pledged against in the bank or the NBFCs, and on the proper valuation of the gold, the amount of the loan is will be disbursed, and thus the loan proceeds will be executed—a few reasons why the gold loan can be considered the most secure form of a loan.
The gold loan is the most preferred form of loan where the eligibility criteria are significantly more minor to fulfil than all the other formats of the loans. The gold loan amount can be used for the same reason for which the personal loan, car loan, education loan or the business loan, etc., given that such amount of gold should be with the applicant to meet those expenses. According to the rules and the regulations, the Indian citizen applies to avail a gold loan if the person is within the age limit of 21 years and 70 years.
The age limit has been kept because there is a consideration that a person of the age of 21 years is financially independent and is capable of paying by self and on the other side of the coin, the maximum age limit has been kept in the 70 years due to consideration at the age a person is not financially independent anymore.
A credit score is a score where the creditworthiness of an individual is judged based on which the loan is availed. If we talk about the personal loan, there is the mandatory rule of having a solid good credit score where there will be a good credit score if the credit score is about 700 marks. Agriculture Gold Loan is also having the advantage of no effect on the credit score for the farmers. In the case of the gold loan, it is not required. If we talk about the car loan, there is the requirement of the same credit score and the compulsory down payment, which is a hectic option and very complex if compared with the gold loan.
It is advised that if the same amount of gold loan is availed, then the problem will be; less as the documentation will be less, less time consuming as well as the risk is less with no requirement of the credit score, and the purpose will also be met. All these things are done based on the valuation as per the gold loan per gram standards. If we talk about the educational loan, then there will be the strict requirement of collateral and a certain percentage of the marks and are not always there in order to fulfil, especially the students who have compromised financial status.
The purity of the gold is there, which marks the difference between the fake or diluted gold or the original gold. The purity of the gold should be between 18 -24 carats to pass the purity certification by the banks and the NBFCs. For example, HDFC Gold Loan also follows safety rules for the customer's interest.
Conclusion
To conclude, we can say that the gold loan is one of the most secure forms of loan where a customer is required to implement some of his basic ideas and plans as per his suitability to have a great deal and execute the loan procedure properly without any issues. The current covid situation also proved that their gold loan has been acting as a boon as most of the Indian houses have some quantity of gold, so it's better to use at this time of the covid crisis else it will be kept as metal only without any use.
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