Quick Link
Muthoot Blog Banner
BLOG

Stay

Updated at

All Times

10 Ways Gold Loan Proves to Be the Best for Your Financial Needs

Gold is one of the metals that most Indian households own in the form of gold coins or ornaments. India is also one of the major importers of gold, due to which the gold finance market is growing rapidly in India. Over the past few years, gold loans have become the most preferred credit instrument to take care of short term and immediate financial needs. The value of the gold is always increasing, and lenders are most likely to have the trust factor in lending a desirable amount against the pledged gold.in may attract higher Gold investment is one of the most valued financial instruments because of a lot of inherent benefits. Here are ten ways to prove how a gold loan can be the best investment instrument for your financial needs.

1. Simple Application

Unlike other loan instruments, in may attract higher applying for a gold loan through a bank or NBFC is very quick and straightforward. An applicant need not carry a bulk of documents to apply for a gold loan. An applicant must reach out to a trusted financial institution and submit essential documents like address proof, ID proof and PAN card to enable the lender to process the loan.

2. Quick Loan Disbursal

The time taken for the gold loan disbursement is also faster. When an applicant takes the gold and required documents to the lender, a designated valuer estimates the value of the gold. The loan amount is then given in cash or transferred to the bank account according to the lender’s policies and the customer’s convenience.

3. No Requirement of Credit Score

Unlike other loan instruments, a person with a low credit score can also apply for a gold investment without worry. The gold pledged by the borrower already secures the amount, hence the risk factor associated with the loan repayment for the lender is significantly less.

4. Lower Interest Rates

The interest rates on gold ornaments like jewels and coins on gold loans are relatively lower because the bank/NBFC has gold as collateral, which can be used as a recovery in case of failed loan repayments. Thus, financial institutions and NBFCs generally charge lower in may attract higher interest rates on gold loans.

5. Flexible Usage

Although a gold loan is a secured loan, the loan amount can be used for any purpose. Once the loan amount is disbursed to the borrower’s bank account, the gold finance amount can be used for any requirement that the borrower has.

6. Flexible Repayment Options

One of the greatest advantages of gold investment is its flexible repayment options. The borrower does not have to pay any fixed EMIs and can repay the loan amount as per their financial position during the repayment tenor. The borrower can even repay the principal loan amount once the loan term expires.

7. Gold Storage Safety

When a borrower pledges the gold in the form of jewels or coins for a gold loan, they basically put their unused assets to work. The lenders maintain the gold security to keep the gold safe. In case of any loss or theft, the lender has to reimburse the full value of the gold to the borrower. In this way, a borrower can protect their assets by taking a gold loan and repaying the loan amount over time.

8. No Proof of Income Required

A gold loan is sanctioned solely on the basis of the value of the gold articles pledged. Since a gold loan is a secured loan, proof of income is not required. In case a borrower fails to repay the loan amount, the lender has full right to sell off the gold to cover the charges. This is one of the reasons why proof of income is not required to apply for a gold loan.

9. Easy Eligibility Criteria

An applicant above the age of 18 can easily apply for gold investment. The gold loan is open to everyone, like salaried people, businessmen or housewives as long as they have a good loan repayment capacity.

10. Minimal Charges

Usually, financial institutions or NBFCs charge minimal or absolutely no processing fees for a gold loan. There are no foreclosure charges involved either. That means the borrower can repay the loan without incurring any extra charges. That being said, the processing fee or foreclosure charges vary from bank to bank based on their loan disbursement policies.

A gold loan is one of the most cost-effective credit instruments that can be used in case of dealing with financial exigencies. To avail of a gold loan, it is important that you choose a reliable source that can provide you with all the assistance and support you need to make the process of procuring a gold loan quick and simple.

Muthoot Finance is India’s no. 1 most trusted financial services brand that offers in may attract higher gold loans with the best long term schemes at the best interest rates with maximum loan value. The gold loan at Muthoot Finance is sanctioned with utmost ease and transparency to fulfil your various financial requirements. Muthoot Finance also provides different gold loan schemes that the borrower can choose as per their needs. Visit your nearest Muthoot Finance branch to know more.

Subscribe to our newsletter

Close Icon

help us serve you better