4 Reasons a Gold Loan is Always the Best Option

by Priya Sharma Gold loan

A person can be in the need of instant funds for many reasons, business or personal. In such a case, most people always tend to go to the gold loan route than any other loan. They go to a bank or Non-Banking Financial Company (NBFC) and avail a loan against their gold jewellery and/or coins. In fact, gold loans have always been around for a long time and have been the best choice among people. To understand this better, here are 4 reasons why a gold loan is always the best option:

1. It has a low interest rate

Of all the available loan options, a gold loan has the lowest interest rate. On the flip side, personal loans are infamous for high interest rates and why it’s mostly the last resort of people. But when someone has a chance to get an instant fund and pay a minimal interest rate, a gold loan is the most prudent decision one can take.

2. It is disbursed immediately

A personal loan involves a lot of paperwork and it can take up to 2-3 days for document verification before the disbursal of funds. On the other hand, the disbursal of the amount in a gold loan is almost instant. When the person takes their gold directly to the bank or NBFC, much of the paperwork is minimised. As a result, the bank or NBFC can disburse in a period as short as one hour. This factor becomes extremely useful in case of a medical emergency, for example, when the requirement of the fund is immediate and waiting for 2-3 days is not feasible. Immediate disbursal in combination with a low interest rate makes gold loans one of the best options.

3. Credit history does not matter

Loan applications are approved based on an individual’s credit history, also known as CIBIL score. If someone has a history of delayed payments, it is difficult for them to take a loan. However, the CIBIL score holds no importance in the context of a gold loan. It’s only your gold as the collateral asset that matters. However, whenever you need immediate funds, just read about the gold loan price today before heading out to avail the loan.

4. It does not require income proof

Even your income proof is not required if you want to opt for a gold loan. For a car loan, home loan, and personal loan, you will have to submit your proof of income which is a major factor in deciding whether your loan should be approved based on your ability to repay it. In the case of a gold loan, what matters for the loan is the price of gold per gram and you will get the loan amount against your gold.

At the end of the day, a gold loan is the best option for instant funds because it is an affordable option. When you take into consideration the aforementioned 4 points, it becomes obvious why people choose it.