Tangible assets like gold carry an exponential market value that seldom depreciates. Therefore, mortgaging these assets can be a viable source of monetary funding in times of financial crisis. Furthermore, financial institutions that offer this facility safeguard your assets until you can reclaim them by repaying the loan amount.
This secured financing medium also comes with lower interest rates and ensures repayment flexibility. Therefore, when choosing a financial institution, take note of the customer benefits they provide. A proper analysis will help you choose the most suitable financial institution or NBFC for a gold loan.
It is the most favored financing medium, and various reasons can back this claim.
Why is a gold loan a viable source to meet financial requirements?
Financial emergencies can arise at any moment, requiring you to gather funds immediately. While filling in an application for a personal loan may be accessible, it comes with a high-interest rate.
This can cause you to dip into your savings for repayment or default payment. Hence, to avoid a bad credit history, applying for a gold loan can be a more feasible solution. It is a secure advance that is the best source of funding owing to the following reasons:
● Simple application process: Gold loans come with a simple application process that takes a matter of minutes. There is no lengthy documentation that you must present. Simply provide your KYC documents, PAN card, and gold to access a loan. You must also fill up an online application form, duly fill and submit it, accompanied by an ID and address proof.
● Quick disbursal: Gold loan approval and disbursal time are very low. After assessing the quality of gold, the lending institution sanctions the loan amount as per the set LTV ratio. An individual must sign a disbursal form claiming his/her agreement to this transaction to receive the amount.
● Available to individuals with low credit scores: A loan against gold is a secured funding option dependent on the quantity of gold placed as a mortgage. Therefore, the institution focuses less on a person’s credit history or score and more on the purity of the gold and its current market value.
● Minimal charges: Another reason why online gold loans are more preferable is that they don't levy prepayment charges. The individual incurs minimal to no processing fees. Many NBFCs like Bajaj Finserv offer gold loans with no hidden charges. Therefore, you shouldn’t develop any concerns regarding the additional charges on the gold loan application.
● Access to high-value monetary funding: A gold loan is the fastest medium of arranging a lump sum amount for requirements like medical emergencies, business investments, etc. Other funding mediums either come with a lower loan amount limit or are available against stringent eligibility and documentation requirements.
● Repayment flexibility: Gold loans come with flexible repayment facilities wherein borrowers can choose to pay off the interest amount at the beginning or through the loan tenor, while the principal is repaid later. This helps prevent debt accumulation and pay off the loan amount.
● Gold storage safety: After receiving the gold from the individual, the financial institution proceeds to transfer it to a secure vault for safekeeping. Select lenders also provide an insurance policy to ensure the safety of the assets during the time they remain as collateral.
These pointers help understand why you should opt for a gold loan from institutions like Bajaj Finserv to address your financial needs. They offer gold loans at minimal interest rates and provide complimentary insurance on gold to ensure safety. So, opt for a gold loan if you require access to high-value monetary funding for any business requirements or medical emergencies.