Indian households have conventionally held on to their wealth in the form of gold. This tradition is centuries old. Gold is a non-productive asset but it can be used as collateral for easy, low-interest loans. The industry for gold loans Jaipur, Delhi, etc is growing tremendously especially in the times of covid-19.
Some of the benefits of the gold loan include
The documentation required for gold loans is minimal when compared to other types of loans. There is no income proof required.
Easy to get
All one needs is gold and a little time. The process is ridiculously free, especially when compared to other loans. It doesn’t matter if one has a poor credit history. As long as one has gold, one can get a gold loan. It is unaffected by and leaves no effect on one’s credit score.
Inexpensive to get
Gold loans have no processing fee and negligible foreclosure costs.
Pay only interest for duration of loan
On most loans, one has to pay an EMI which is high because it involves a high component of the original principal. With gold loans, one need only pay interest till one decide to end the loan.
The lender takes less risk when lending on loan, this means that risk costs are low. That, in turn, keeps interest low.
Since the principal is not a part of the loan and interest is low, the instalment amount stays low. Thus one doesn’t ever have to worry about a lot of EMI or instalment load on one’s income.
Good on your credit
Low instalment burden helps one’s credit score and keeps one’s credit limit free in case one needs further loans.
Makes gold productive.
While it is good to have gold for a hobby or as a sort of investment, it is a non-productive asset. Gold may gain value over time but it won’t generate income in the meantime. Take a gold loan on it and one can invest it into something productive but gold sits gaining value for one.
Keeps your gold safe
one can Also think of the interest one pays as a sort of locker fee to keep one’s gold face. Since the physical gold is in the custody of the lender. One doesn’t have to worry about it being stolen or destroyed anyhow.
Good for emergencies
Gold loans can help finance one’s way through emergencies like sickness of a loved one, a marriage in the family, a bad spell in business, sudden loss of unemployment, etc. Whatever the emergency is, the gold loan can help one through it.
The benefits of a gold loan make it an excellent way of getting credit. Go for a gold loan company in Jaipur, Mumbai anywhere and one can’t go wrong.
The only risk involved in gold loans is if one is unable to produce principle in meantime, one’s gold may be confiscated by the lender. That is a risk in all asset-based loans. As long as one is sure of paying back the loan in time, a gold loan is the best option in the market.