Importance of Gold Loan Scheme For Emergency Needs

The importance of the gold loan scheme in urgent cash requirements cannot be stressed enough. Today, gold has ceased to serve its purpose only in important ceremonial occasions. Rather, this idle asset is highly valued due to its easy to liquidate option. 

Individuals in need of cash can optimally use gold and avail numerous benefits from the gold loan.

Advantages of Gold loan Scheme

1.      Reduced borrowing cost

Gold loans are secured financing. Thus, the borrowing cost is lower than other unsecured loans. Moreover, as lenders need not worry about future default (as they have gold as collateral), they lend the money at reduced interest rates. Hence, the borrower can save a substantial amount on this secured borrowing.  

2. Minimal documentation

Gold loan scheme features minimal documentation, meaning individuals can avail of loans against gold by submitting minimal documentation such as identity and address proof. This limited documentation of gold loans enables individuals to get instant cash in an emergency.  

3.      High LTV

From gold loan schemes, individuals can expect LTV (Loan-to-Value ratio) up to 90%. Therefore, individuals can expect high valued credit. Keep in mind though that this percentage can differ from one lender to another.

4. Convenient repayment scheme

Gold loan schemes come with flexible repayment options. Individuals can opt for EMI payment options or choose to pay interest periodically and the principal at the end of the tenor, or they can select to pay interest upfront and principal later. Thus, individuals can repay the loan amount at their convenience. Reputed NBFCs offer gold loans with flexible repayment facilities.   

5. Faster processing

Not only is the gold loan process simple, but also faster. Thanks to the secured nature of gold loans, individuals can get cash instantly and cover emergency expenses. 

The points mentioned above well describes the importance of gold loans, which can better enhance the knowledge of individuals willing to avail the same.