From being used in beautiful jewellery, gold has become a popular investment tool in India. You may also get an Gold Loan if you have an urgent need to cash out, like emergency business expenses, unplanned expenses, or any other financial need. So, how exactly does an Gold Loan operate? Let’s learn more
What is a Gold Loan? How does it function?
Secured loans
When you take out a Gold Loan, the gold loan company or the bank uses your gold as collateral during the period of the loan. Banks or gold loan companies charge a fee for interest, and once you repay the loan in full, the Gold Loan Companies returns your jewelry. Sneak a peek at this website to get breaking news on gold loan near me.
Gold accepted as a type of gold
Another essential thing you need to be aware of about how Gold Loan works is the kind of gold accepted. Gold jewellery is not accepted by the majority of banks or gold loan companies. In addition, the purity of gold that is used as collateral must be between 18K to 22K.
Gold Loan Companies or banks can provide maximum the loan-to-value ratio
The majority of Gold Loan Companies or banks offer Gold Loans with a loan to value ratio of 75% on gold. If you decide to take out a mortgage on gold worth Rs 100,000, the maximum loan amount you are able to get is Rs 75,000.
Gold evaluation as well as loan sanction procedure
In discussing the way in which Gold Loan work, we must mention the evaluation and sanctioning procedure. After reviewing the collateral of gold, the lender decides on the best amount and interest rate you can get. You, as the borrower, can select the duration of loan repayment and it should range between 6 to 24 months. With Augmont, you can get Gold Loan in less than an hour.
What are the benefits of getting a gold loan?
One of the main advantages of using gold as a currency for borrowing is:
Reasonable interest rates and minimal processing charges
The documentation is not extensive.
Low or no loan foreclosure charges
Flexible terms for repayment
High LTV Ratio
There are numerous loan repayment options
Do you think that taking out a gold-based loan is secure?
A safe investment option is gold loans. Gold may not be of much value or be very low, but when it comes to loans for gold, borrowers can use the cash for various expense requirements.
Are gold-backed loans better than personal loans?
A gold loan could be more beneficial to a personal loan if a borrower repays the loan within a shorter duration. These are also known to have lower interest rates. A personal loan, however, is preferred by borrowers due to its long-term duration and higher sum of loan. Based on personal needs and financial requirements, the borrower has the option of choosing between these two.
What are the best ways to obtain a loan using gold?
It is easy to get a gold loan from a financial institution either online , if these services are available online, or offline. Online applications can be made via the the official website of the lending institution.
