IS GOLD LOAN VERY USEFUL ?

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THESE ARE SOME POINTS THAT CAN HELP YOU WITH DECIDING ON THE BENEFITS OF A GOLD LOAN

 

1. Money In Hand:-

Gold loans are secured loans that are guaranteed by the gold jewelry you promise as collateral. This means that the NBFC or bank from which you borrow only checks the purity, weight, and legal ownership of the gold ornaments you pledge. Since lenders are not needed to conduct additional tests such as a CIBIL score check, which is required for other forms of loans, the time it takes to receive a gold loan normally varies from 15 minutes to around 2-3 hours because of the fast disbursement, this loan is suitable for any type of time-sensitive requirement.

 

2. Loan Amount Eligibility:-

The loan sum decides if a specific form of loan is appropriate for the situation. Even if they come with other incentives, loans that do not have the necessary amount are not viable. Gold loans have a distinct advantage in this regard because, in the case of gold loans, the gold decides your loan eligibility and nothing else. In the case of a gold loan, the loan amount is determined by the weight of your jewelry. IIFL Gold Loan typically offers a 60 percent to 75 percent LTV (loan to value ratio). The amount you'd get per gram of gold is determined by multiplying this by the current gold price. You do not need to meet any other requirements, such as a CIBIL score or a minimum income requirement if you have enough gold to cover your loan sum. Even someone with no income and a low CIBIL score can get a loan for lakhs of rupees if he has enough gold. In comparison, your eligibility for a personal loan is determined by your payment history (CIBIL score), your income statement, and several other variables (such as your employer), all of which are beyond your control. As a result, this option is unsuitable for any severe requirements. A personal loan's typical cap is about 40% to 50% of your annual take-home pay. Imagine if you need rs. 5 lac but you’ve been offered 50k then? 

 

3. Interest Rate:-

In most cases, gold loan companies do not adjust the interest rate based on the borrower's risk profile. This assumes that if a scheme is implemented, all borrowers will receive equal interest rates. Depending on the NBFC and the system, it can range from 1% to 2.5 percent per month. If you select your NBFC and scheme carefully, you can be able to avoid paying processing fees, assessment fees, stamp duty, and other fees. Also, have a look at the Gold Rate Today. This may help you to get better deals in the future. Personal loan interest rates, on the other hand, are determined by your CIBIL ranking, salary/income, educational history, and other factors.

 

4. Monthly Repayment Amount:-

Customers who take out a gold loan are normally not allowed to pay it back every month. NBFCs offer gold loans with periods ranging from three to six months, with customers expected to repay the principal as well as accumulated interest at the end of the loan period. Banks provide gold loans with monthly payments, but these are just for the interest owed.

 

Customers who take out a personal loan, on the other hand, must pay monthly EMIs that include a portion of the principal as well as accumulated interest. In contrast to a gold loan, this increases the monthly payment rate on a personal loan. A gold loan from an NBFC is a safer option for users who want more repayment flexibility. Your gold, on the other hand, is extremely safe if you choose the right company with stable processes, complete transparency, and RBI approval.

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