The ongoing pandemic situation has caused historic disruptions in the economic fabric of the globe. India, being one of the worst countries hit by Covid-19, has incurred a significant blow to its economy. Many individuals over the past few months have lost their employment, faced pay cuts, and suffered immense losses in their businesses.
Even people who are still employed or have operational businesses are facing significant uncertainty over the future of their income. Thus, several individuals are turning to other sources of funding to ensure their sustenance and lifestyle. While some are considering options like a personal loan, others are opting to sell gold to stabilise their financial position in these heady times. However, there’s also another option that many are utilising to address the current economic predicament, a gold loan.
What is a Gold Loan?
A gold loan is where you pledge your gold possessions to avail a certain amount against their market value.
But why is pledging gold better than selling it?
Unlike when you sell gold online or offline, with a gold loan, you will not have to give up the ownership of the items in your possession. You can release the gold articles from a lender’s custody once you repay the loan in full by the due date.
But, like selling gold, you can capitalise on its equity to acquire substantial funds and address your monetary obligations conveniently.
This way, your financial responsibilities are looked after, while you maintain possession of some of the most valuable assets at your disposal.
Apart from that, there’s another reason why a gold loan might be preferable to you than choosing to sell gold.
When you buy a piece of gold jewellery, alongside the gold’s value, you also pay for the making charge of such ornament. However, when you go to sell gold online/offline, you only receive an amount equivalent to the gold’s value and not the making charge component levied by the jewellery store.
Hence, you may want to consider a gold loan, because in this case, you retain ownership of the articles of gold you pledge.
Benefits of a Gold Loan over Other Financing Options
You might wonder if the benefits of gold loans compare to different unsecured financing options. Well, read along!
You can access an array of financing options in the market today, ranging from personal loans to payday loans. And, recent technological advancements and rapid digitisation have made these options more accessible to the all.
However, despite the accessibility, the essential characteristics of an unsecured loan are the same. You have to satisfy several criteria to qualify for a loan, and they involve charging substantial rates of interest.
For instance, most reputed financial institutions require an applicant to possess a credit score of above 750 to be eligible for a personal loan as well as proper employment and steady income. Even after satisfying these criteria, the interest rates can be considerable.
Other institutions that offer options like payday loans do not have in place many stringent criteria. But, they charge exorbitant interest rates and additional costs, which can weigh down a borrower’s finances considerably.
Gold loans do not involve these hassles typically. They are affordable and straightforward to avail. Thus, they fare better for borrowers facing income uncertainty during these testing times from several aspects.
Additionally, Rupeek Fintech Pvt. Ltd. provides facilities like Rupeek Quick to further ease institutional borrowing for customers.
Rupeek Quick: A Suitable Financing Solution for Instant Cash Needs
Instead of availing a lumpsum amount at once and paying interest on the entire sum, you may prefer a solution where you can withdraw small amounts whenever you need and pay interest only on the withdrawn sum. If that’s the case, Rupeek Quick is an ideal solution for you.
When you apply for this facility, you are given access to a line of credit, based on the market value of pledged gold articles. You can withdraw any amount from this sanctioned credit line whenever you need. Plus, interest is calculated only on the amount you withdraw.
Thus, with this facility, you gain access to substantial funds at your disposal without accruing interest on the entire sum. Moreover, you can repay the withdrawn amount plus the interest on it anytime within 6 months of availing it. Additionally, you can release articles of gold whenever you need with doorstep service.
With these convenient features, you can optimise your benefits of gold loans.
Alongside this facility, there are several other advantages to availing this financing facility, especially during such a trying period.
Gold Loan: Features and Benefits
Some of the reasons why an online gold loan might be a better option than choosing to sell gold online are:
- Hassle-free doorstep loan availability in 30 minutes
Selling gold involves several pronounced hassles, like finding a buyer and ensuring you are getting the right price for it. However, when you apply for a gold loan with a reputed lender, the process is relatively simple in comparison.
For instance, Rupeek provides doorstep loan service. When you apply for such a financing facility, the lender sends a loan manager to your home. This person carries equipment to evaluate the purity and value of your gold possessions.
Once their appraisal is complete, they send an approval request based on their evaluations. The institution issues its approval, and subsequently, you receive the loan amount in your account. What’s more, this entire process requires only 30 minutes, hence, ensuring instant access to funds.
Additionally, the loan manager leaves with the pledged gold articles only after you receive the loan amount in your account.
2. High loan to value ratio
One of the significant benefits of gold loans is their high loan to value ratio. You receive a substantial percentage of the pledged asset’s market value with a high LTV. This allows you to strengthen your finances considerably.
Moreover, it does not entail any end-use restriction. So, you can mitigate a number of monthly expenses, like electricity bills, credit card dues, etc. with this financing option conveniently.
3. Nominal documentation
Gold loans do not involve any of the red tape associated with other types of loans. You can access this financing facility with minimal eligibility criteria and documentation. A loan manager only requires your KYC documents to complete the registration process, and then you are good to go.
4. Affordable interest rates
You can also avail a gold loan at considerably low interest rates. Hence, you can avail this financing option sans saddling your finances. Moreover, this NBFC provides different repayment options so you can tailor it to your convenience.
For instance, you can opt for a single bullet payment to repay the entire payable amount at the end of the loan tenure. Or you can also choose to pay interest-only EMIs to reduce any repayment worries.
5. Robust security features
When pledging your possessions over choosing to sell gold, you may be worried about their security. Rest assured, because reputed lenders have robust security mechanisms in place. The loan managers appointed by this NBFC carry your gold items in a GPS-traceable bag and store it in a security vault with a bank within 3 km from your home. Additionally, they provide an insurance policy for your assets to ensure maximum security.
With these features and more, a gold loan makes for a suitable financing option to address a financial crisis when compared with selling gold or other unsecured financing options.