With the Coronavirus pandemic hitting the world hard, an individual’s financial portfolio is battered. The cash crunch, owing to the salary cuts and household income squeeze, has led people queuing up at the counters of Financial Institutions to avail loans.
And yet, are people able to meet their requirement? Most of the time, they are not! They fail to distinguish between the gold loan and other loans for they are confused about which serves their purpose better. Personal loans require no collateral security; the discernment of the loan is purely based on the profile and income of a person though. In this current situation, they have to consider all the pros and cons of the financial options available.
Gold Loans; the best option
Fortunately, the skyrocketing gold prices have come to their rescue by allowing them to opt for gold loans over any other loans. It is presumed that gold loans can overcome cash crunch as other avenues entail huge costs and may put the borrowers under stress later. Gold loans are short-term loans where the tenure is limited to a few months to a year and can serve short-term requirements. Besides, gold loans are less expensive and are more attractive for the below mentioned benefits:
- Fast approval and easy disbursal process
- Higher loan amount
- No credit history required
- Low interest rate
- Flexible repayment options
- Hassel-free documentation
- Accurate rate evaluation
Furthermore, the borrower has the opportunity to improve their CIBIL score by reimbursing interest/ repaying the loan on time.
Owing to the current financial crunches, banks and financial institutions have become careful of giving unsecured loans such as personal loans. It requires a lot of paperwork and documentation process. For this reason, the best option is gold loans instead. A customer can obtain a gold loan and walk out of the branch in a matter of a few minutes.
Multiple options to avail gold loan- whether Financial Institution or Gold Jewellery
When it comes to pawning gold, it is the perfect option for quick funds in India as the country is the second-biggest consumer of gold worldwide. Generally speaking, the history of pawning business dates backs to centuries. However, in the last couple of decades, monetizing gold has become prevalent and the money is utilized for productive and development purposes.
One of the first choices to make while opting for gold loan is the institution that offers. It is all about choosing between a gold loan financial Institution and a gold loan from jewellery/unorganized sector.
Nevertheless, several aspects decide this; then, how do you make the right choice? Let us see some of the benefits of opting for a gold loan from financial institutions over jewellers/unorganized player:
- Low Interest rate
- More loan to value (LTV)
- Flexible tenure
- More repayment options
- Bullet payment options
- More accountability and reliability
In addition to that financial institutions offer more security to the gold pledged for the reason that most of the NBFCs have comprehensive insurance coverage for the pledged gold. Governance and compliance under the guidelines of RBI make NBFCs more accountable. The above benefits ensure financial institutions as the better option owing to the interest rates, as well as the safety of the gold.