One of the popular loans in India is a gold loan because they are easy to obtain and require minimal documentation. In addition, such loans offer a quick and immediate source of funds for emergency situations, as it is disbursed within a few hours of submitting the application.
Moreover, specific tools, such as a gold loan calculator, are readily available nowadays. Therefore, it helps the potential borrower have a fair idea of everything before actually availing it.
What is a gold loan?
It is a type of secured loan in which a borrower pledges their gold ornaments or jewelry as collateral to access funds from a lender. Banks, non-banking financial companies (NBFCs), and other financial institutions commonly offer such types of loans.
The amount of the loan that can be obtained through a gold loan typically ranges from a few thousand to several lakhs, depending on the value of the gold pledged. The lender usually appraises the gold and provides a loan amount that is a percentage of the appraised value. Further, the borrower is required to repay the loan amount along with interest within a specified period.
What are its advantages?
Such loans from a gold loan app are relatively easy to obtain compared to other loan types, as the borrower only needs to pledge their gold ornaments or jewelry as collateral. Moreover, the loan can be disbursed within just a short time of submitting the application, making it a convenient option for those needing emergency funds.
Gold loans require very little and minimal documentation, making the overall loan application process hassle-free. The borrower only needs to provide identity proof and address proof, as well as the gold ornaments/jewelry as collateral.
Lower rate of interest
The gold loan interest rate is usually lower than those on unsecured loans, as it is secured by gold collateral. This makes it a pretty cost-effective option for potential borrowers.
Such types of loans offer flexible repayment options, with the borrower being able to choose the tenure of the loan and repayment schedule as per their needs. This ultimately allows the borrowers to repay the loan in a manner that is convenient for them.
Unlike some other types of loans, there are no restrictions on the end use of the funds obtained through a gold loan. The borrower can use these funds for any purpose, including business expansion, home improvement, medical expenses, or education.
How to get a gold loan?
Around three months ago, I planned to avail a gold loan to facilitate my home renovation. I simply used a gold loan calculator online, the one the Bajaj Finserv application offered, and calculated everything. Here is an easy step-by-step guide on how to get a gold loan:
- Download the Bajaj Finserv application on your smartphone
- Sign up with your mobile number
- Tap on Gold Loan under the ‘Products for you’ section
- Proceed further as per your requirement