It is preferable to choose a gold loan if we select any loan to be availed. If we talk about the personal loan, then it is filled with so many complexities. On the other side, the personal coin loan is a type of loan that can be considered an unsecured loan and a secured loan. This is because the personal loan, when available for any unexplained reason, and collateral is guaranteed. If there is no security or any collateral is set, it will be explained as the secured loan.
On the contrary of the fact why a gold loan will be the best option can be defined as follows-
Availability: The gold loans are readily available as most of the 80% of the Indian population uses gold in the forms of ornaments, and it is used as a good luck sign. It is almost present in any of the quantities in most of the houses for the promising moments. The readily available metal in the form of ornaments and coins makes it very much handy during any emergencies and using the loan against it to get out of the situation.
Fast: Compared to the other types of loans, gold loan is comparatively more secured to avail as it is the only type of loan the whole procedure of which is entirely done in the online mode. One will not have to travel from one place to another in search of the meeting or get notifications.
Secured: It is the most secured form of loan where there will be no risk from both the borrower or the loan provider. The presence of no collateral or any security does not affect it at all in any circumstances. For example, Muthoot Finance gold loan is secured at the rate of 7% as what they are offering. The reason is that the gold itself acts as the collateral, which in case of any loss or issue can be sold or auctioned and can recollect the amount of the loan available to the customers.
Less documentation : The involvement of less documentation than that of the personal loan or the educational loan where there is a massive list of documents one needs to present. Either there will be circumstances, and the conditions will be such that it will become too tough for an ordinary person to have all the documents to confirm eligibility, and the process is too complex also due to which many problems arise who are applying for the gold loan. The only documents required in the gold loan are the proof of address, the proof of identity, and the passport size photographs.
Low rate of interest : The low rate of interest compared to that of the personal loan, which shaves extravagant high exploiting rate of interest and creates a massive pressure of the loan burden over the customers as the valuation is done on the gold loan per gram. Sometimes it becomes impossible to carry the loan procedure.
Through many surveys for the income age group between the age of 25-45 years, it has been found that there are most of them first availed personal loan but afterwards for meeting the requirements when there is a shortfall of funds. They selected the gold loan for its cheapest interest, which makes it too much more accessible to repay the loan without affecting the current budget of the customers. On the other side of the coin, there should be some focus on selecting the loan provider. The lowest rate of interest and all the other factors should be appropriately checked as per the best-suited loan option, and then to fix it as the smooth running of the loan and smooth repayment is the main focus to be done for availing the loan.
Conclusion
To conclude, it can be said that it is not compulsory, but it is necessary to choose a gold loan when we need the funds. In the meanwhile, as low the pressure will be more efficient a situation can be handled. This is why the gold loan is always suitable for all age groups, for all positions at any point in time.
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