How gold loan proves to be a beneficial financial source?Here are some of the proven benefits of the said credit that borrowers should know before they apply for a gold loan. Substantial credit value The availability of considerable credits against gold loans makes it a preferred choice among borrowers. In addition, the flexibility of usage makes it further accessible for big-ticket expenses like weddings, business’ working capital needs, medical bills, etc. Technically, the weight of the collateral and an applicant’s credit profile are the primary factors that lenders scrutinize to decide the loan amount. A per RBI, the LTV ratio on loan against gold is currently 90%. This makes it easier for borrowers to access a high loan value. They can leverage this factor by offering at least 24karat gold items. Higher purity assures higher credit availability.
Reasonable interest ratesBeing a secured loan variant allows lenders to levy an affordable gold loan interest rate. An applicant fulfilling the eligibility norms and possessing the purest form of gold jewellery is obliged to receive competitive loan rates. This feature gradually reduces the monthly repayments and removes the burden on disposable income. With systematic planning, borrowers can enjoy lucrative savings from the entire process. However, it is important to know that the applicable interest rate is completely dependent on a lending institution. Therefore, for successful borrowing, individuals must compare lenders first.
Multiple repayment optionsThe best feature of a gold loan from financial institutions like Bajaj Finserv lies in the availability of multiple repayment options. Borrowers receive the flexibility to choose from repayment options based on their financial capability. They are free to follow the traditional EMI payment that includes both interest and principal. Borrowers can also select to pay only the interest when the tenor starts and settle the principal later. If one decides to repay interest monthly or quarterly, they are free to pay principal at the end of the tenor.
- No issue of credit score
- Instant loan approval and disbursal