Reason to Consider Gold Loan Over Other Loans
Gold is a popular investment option, used both as a saving and borrowing tool. A gold loan is excellent for quick financing. You can get this loan by pledging gold ornaments. The loan amount is equal to a fixed percentage of the value of the gold. The repayment of these loans can be made in fixed monthly installments, partial payments and in fine payments according to your convenience.
There are many factors that you need to consider before availing of gold loans. These include the purity of the gold, the assessment of the true value of the gold after removal of impurities, and the current market price. Upon full loan repayments, the borrower can take possession of the gold particles. So, let’s understand the advantages of these loans over other loans.
Lower interest rates
When choosing any type of loan facility, the interest rate emerges as an essential factor. Gold loans, being secured loans, always come with lower interest rates than other loans. During the process of obtaining these loans, you have to hand over your gold to the lender, which reduces the credit risk. This is the main reason for the drop in interest rates. Reduced interest rates have lower repayment amounts, which reduces the financial burden. With Muthoot Gold Loans, you don’t have to go through the hassle of negotiating. We offer the best interest rates on gold loans in the market.
Higher loan-to-value ratio
Whenever you decide to go for a loan facility, you should always research the loan amount. Choosing a loan against gold satisfies all your needs as it allows you to get higher loan amounts. You have to keep in mind the loan to value ratio provided by the lender. Muthoot Fincorp offers a gold loan ranging from 65% to 75% of the total value of gold based on the purity of the collateral. You can also supplement the loans when you need additional funds.
Variety of repayment options
When you choose a gold loan, you have access to several repayment options, which helps you to pay the required loan amounts on time. Having the freedom to choose a repayment option as per your convenience and financial capability is the reason people opt for these loans. Basically, there are four types of repayment options: monthly equivalent payments, interest payment at regular intervals (whether monthly, quarterly, annually), upfront interest payment, and bullet repayment method.
Freedom of end use
One of the important advantages of obtaining a loan against gold is that there is no limitation on their use. Therefore, you can use them to meet all your requirements, whether it be for medical emergencies, growing a business, down payments for a vehicle, or farming needs. This freedom is also one of the reasons why gold loans are so popular and widely chosen by clients.
There are no strict eligibility criteria for availing such loans like credit history and CIBIL scores. The loan amount is usually based on the value and purity of the gold that you are willing to give to your lender. You can just use a gold loan calculator to calculate the maximum amount.
The simple and minimum requirement for the documents is the reason why you should opt for these loans. Some essential documents such as KYC forms and passport size photographs are required.
Easy and instant financing
If you are in a hurry to get a loan as soon as possible, choosing a gold loan is your stop. For this you need to visit the branch and submit your ornaments. You will be informed of the maximum amount during the day. The value of your property will be assessed and the loan amount will be decided accordingly. After that, the documentation process is complete, which is very straightforward. Then your loan will be authenticated. Successful completion of these steps will result in the required loan amount being disbursed into your account.
Security of your gold
The gold you give us is kept in future-proof lockers; therefore, they are safe. These lockers are more secure than the ones in your home. The safes are monitored 24/7, and the gold you deposit with us is also insured. After payment of the outstanding amount, your gold is returned to you. Therefore, you can be doubly sure of the safety of your gold.
At Muthoot FinCorp, ornaments are placed in safe rooms with CCTV cameras to ensure safety and security. It is common to resort to loans for gold at the lowest interest rates. In addition, it offers gold loan programs that the borrowers can select according to their needs. It also gives you access to unique features like cashback and digital payments.