The pandemic with which people have spent the last 2 years has caused a huge disruption in the Indian economy. Many people have lost their jobs and faced pay cuts. The businesses have also suffered huge losses, and some of the small ones shut down because of a capital crunch.
But those who have survived the tide are struggling with an uncertain future. This is because; they have exhausted their surplus capital, and now they are searching for some other source of funds to take care of their business further. People are taking unsecured loans like personal loans or secured ones like loans again assets and home loans. But as per experts, the most stable option is going for a gold loan online or offline. They are much better than selling the actual gold.
What is a gold loan?
A gold loan is a secured loan that is provided by financial institutions. Here, the gold owner pledges their gold jewellery and bars to get a certain amount of money against their market value of them. Now, the question is, why should one opt for a gold loan? Well, taking a loan against gold does not mean one loses ownership of their prized possessions. When the full amount of the loan is paid back, one can get back their gold from the lender’s custody. One must not sell a family heirloom or a gift because then it can be an emotional loss and a financial one too.
By taking a gold loan, one can go for a short-term monetary need to fulfill it and then can gain the full ownership of their possessions once they are in a better position financially.
Benefits of taking a gold loan
Here are some major benefits of taking a gold loan:
Loan available at the doorstep
Selling gold can be a difficult process. One needs to find a reliable buyer who will pay the accurate price. This transaction can take a couple of weeks to finish. On the other hand, going for a gold loan is a very simple process. There are, in fact, many companies that provide gold loans at the doorstep. Once a gold loan is applied, the request is generated based on the appraisal and evaluation. When the loan is approved, the amount gets transferred to the bank account within an hour.
High loan to value ratio
Another major benefit is that a gold loan is a credit that is received against the pledged asset with a high loan to value ratio. This can offer financial freedom to users because they can use the high loan amount for other pending expenses.
Gold loans never require heavy documents as compared to other types of loans. One just needs their KYC documents to complete the registration process and then apply for the gold loan.
With online gold loans and offline ones, there are affordable interest rates and convenient payment options. Hence, it becomes an affordable option as compared to other kinds of loans. Once the repayment is done, one can get their assets back.