Positive And Negative Aspects About Gold Loan

There are somehow not that bad effects of the gold loan while availing. However, to get the gold loan there is not that big deal to crack. You can just go to the bank or do it online or there are apps from the banks. While getting the gold loan you must have the least things to think about because it’s a secured loan that requires collateral. Which you should deposit and you will get the loan as per the quantity and quality of the gold.

The good points

The merits of a gold loan are in a big amount and you get positive results when you are going to avail of the gold loan. There are some points to notice when you are going to get the loan.

• The swift processing

For a gold loan, the processing is going to be done immediately as it’s a secured loan and they will ask you for the collateral. The gold loan process is a saver to you as short and easy. The money you will get very fast and they will just be going to check the gold you are having and you will get the loan within a day. There is not a requirement for any kind of long documents or process. You just have to submit the minimal KYC documents like Aadhar card, PAN card, or Voter id. This is the only requirement for the gold loan. Now make sure that the gold must be authentic and between 18 to 22 carat. And submit the real gold rather than the rolled-gold.

• Low interest

The loans are somehow turned out to be a burden when you are having a high-interest rate. There are loans that you can see with high interest as they will make you feel in trouble when you will be unable to pay the loan or EMIs on time so always check your EMI amount with gold loan EMI calculator before applying for the loan. When you avail the gold loan from the NBFCs they will definitely charge you more interest rate than the normal banks. But when we compare it with the other banks then this will be a good solution for the less interest rate because they will ask you for gold as collateral so they are safe if you are unable to pay the gold loan.

• Negligible processing fees

The gold loan process is not that extensive so the processing fees are nil for some banks or they will take money as very less which will be easy and affordable for you.

• No charges for foreclosure

There is not any money if you are going to pay the amount earlier than the maturity of the loan. A credit score is not needed for the gold loan.

• The credit score

There is not a requirement for any good CIBIL score. You are a defaulter of any loan and couldn’t pay the amount of the previous one. The Capital small finance bank gold loan is a good option for you to get the loan. Then also they will give you a loan because they will deposit the collateral and they will feel safe if still, you are not going to deposit the loan they will auction the gold which you have deposited.

The bad points

There are not as such demerits of the gold loan whim we will be discussing the gold loan.

• Loan to value

The loan to value ratio is said to be the ratio that is when you get the loan as per the market value of the gold. If there is the value of gold less in the market then this will definitely go to affect you.

• Default

If you will try to do any kind of malpractice in paying back the loan then that will create a very big problem for the collateral you have deposited. The bank will auction that and you will be going to lose the whole gold.

Lastly, gold has many merits and demerits but to avail, after all the details and research is a must thing. As when we compare the gold with the other loan it’s way more than better.