Gold loan is a type of secured loan i.e. the loan is provided against collateral in the form of different types of gold jewellery or gold coins. You have to deposit your gold and you get the deposited gold ornaments or coins back only after you have paid back the loan amount in full including interest. Gold loan business, being secure, features short processing times, a low interest rate and short to medium term tenure. The amount of loan against gold you will get depends upon the value of the gold you surrender for the loan. The value and purity of the gold will be checked before we takes possession of the gold. This loan is a good option, if you are looking for instant liquidity. Also, since the approval of this loan does not depend upon your credit history or income, you need not worry about your adversely impacting your credit score nor scramble for income proofs for loan approval.
Why Gold Loan?
A few reasons for the popularity loan against gold are as follows:
- Gold loans feature a low interest rate as compared to most other loan options.
- Gold Loans tenure ranges from a few days to 5 years or more depending upon the lender.
- The repayment options on gold loan can be selected as per the choice of the borrower.
- In most cases, the lender does not charge a pre-payment penalty on gold loans.
- Minimal documentation required and PAN Card is not mandatory for this loan.
- Fast disbursement i.e. loan is provided within a few minutes to a few hours.