Credibility - Credibility is the ability of a person to repay the loan amount. One should always think upon and plan and then decide whether he or she will go for availing a loan. One should always look forward to any sudden expense in the coming few weeks. For example, a person already knows that is an expense that needs to be incurred in the coming days while on the other side of the coin the requirement of a loan is also at the same time which will be used in some personal requirements.
Loan amount -The loan amount should be accurately known by the customers. Many times it happens that in mind thought of some other values while valuation one turned out to be different. The loan amount generally is a maximum of 90% of the total value of the gold .valuation is done on the Gold Loan Per Gram. The other things which should be certified are based on the purity of the gold, the current ongoing rate of gold in the market, and the full details of the policy of the lending company.
In different banks and different NBFCS, the repayment of the gold loan system is different.
Some may choose the policy of bullet payment in which a lump sum amount is cleared and this happens with the sudden accumulation of small payments. This helps in reducing the loan pressure from the loan payer or the borrower.
As the financial companies and the Institutions generally provide the tenure of 24 months while on the other side of the coin the tenure period can be extended to a period of 36 months. This has been set up according to flexibility and the requirement of the customers. For exemplar, if a person is having a low income but will be able to pay with the option of a long tenure period. In the same way, if a person is financially sound then there will be no requirement for long period repayment.
In India gold is used in the form of ornaments and jewelry. Thus we can express it as a Jewellery Loan Online as well which requires insurance. Insurance of the gold which is taken as the collateral is also needed to be safe and secured. To do this provision few banks and NBFCs make some arrangements to provide some insurance providers. If some arrangement is not done from their end then they will suggest the customers do the same.
There are certain advantages if a gold loan is availed. they are as follows-
Minimum documentation-The most important feature of the gold loan is that the application procedure is mostly done in the online or digitalized mode due to which excludes the use of pen and paper and thus reduces the risk of any mistakes as well. Like in the case of the other types of loans like that of personal and other types of loans.in most banks, only two documents are considered as the primary ones. Those are the proof of address and the proof of identity.
Secured and fast-The other important advantage of the gold loan is that it is not too complex as in most cases it is done and the disbursal amount is credited within 24 hours if everything is as per the rules provided by the authorities.
Conclusion
To conclude we can say that personal loan there is no collateral or any kind of security is there that is why the risk factor for generating a bad debt arises in the view of the loan providing institutions while in the case of the gold loan gold itself is valuable collateral which if any kind of default or dispute arises can be sold or auctioned to recover the loan amount. Last but not the least, one of the main reasons people prefer the gold loan the most is the low rate of interest as compared to any of the other types of loans. The reason behind keeping the low rate of interest is the lowest risk factor from both the sides of the borrower and the lender.
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