A gold loan is a secured loan against which the borrower avails capital by keeping their gold with a bank or a financial institution as security. Golden can also be understood as a mortgage loan. The interest rate of gold is dependent on the purity of gold. In the public sector interest rates vary from 8% per annum to 18% per annum whereas in the private sector these rates vary as high as 24% per annum. A gold loan is basically a short-term to medium-term loan the time duration varies from 6 to 24 months. Gold loan is beneficial from other loans because the gold loan is available even to low credit scores because the ornaments are deposited with the bank as collateral security against the loan. Gold loans serve as a source of support when you urgently need capital. Gold loans have minimal processing fees and reasonable interest rates as compared to any other loans. There is less documentation in gold loans as you only have to provide your identity proof (like Aadhaar card, voter id, Ration card, etc.), address proof for KYC. You will get different loan repaying options in a gold loan which helps you to repay your loan amount according to your comfort. A gold loan is a better option as compared to a personal loan. Getting a gold loan from a bank either online is easy. Indians are known for their love for gold across the whole world. Gold loans can also be used to fund any emergency cash requirements like business setup, medical expenses, etc.
Benefits offered by gold loans are:
- Gold loans have quick processing because gold loans have physical gold or gold ornaments as collateral security. Gold loans also have a unique feature that allows the borrower to only pay the interest component while repaying the loan.
- Since gold loans are secured, banks charge a low-interest rate as compared to unsecured loans.
- Some banks charge low processing fees or do not charge any processing fee because gold is instantly provided as collateral security.
- Poor credit history does not matter in a gold loan, lenders are assured about the repayment of the principal amount.
- The responsibility of the security of the gold is that of the lender. It was kept safe in the bank’s locker. Once the borrower repays the loan the gold is returned by the bank. Before taking a gold loan you can easily calculate the amount which you will get in lieu of gold through gold loan EMI calculator. Gold loan calculator is an online tool that can calculate the EMI against the gold loan. EMI gold loan calculator I found in rupeek.com. In rupeek it is very easy to use an EMI gold calculator to calculate capital which you will get against your gold article. You only have to enter your gold ornaments details and click enter and then you will get to know your amount against your gold article. Gold loans are one of the most affordable and customer-friendly forms of loan.