Gold loan is a valuable financial tool for buying gold. It is safe, secure and has limited liability and at IFL, all you need is up to 18 carats of gold to avail loans. It is common for households and businesses to pledge gold as collateral to meet their financial needs. Most people prefer gold loans to other loans because of extremely low interest rates for the former. And due to its security, it is the best loan to meet short-term financial needs. Another benefit is the less amount of paperwork it requires. With the right KYC documents, you can secure a Gold Loan in no time. IFL for instance, sanctions Gold Loans in less than 30 minutes.
The world gold council announced that demand for gold loans, both through banks and non-banking financial enterprises, has seen immense growth owing to the economic impact of the coronavirus pandemic.
Why the sudden increase in demand?
A sudden decrease in cash flow in the economy has led to rise in demand for gold loans, many people lost their jobs and sources of income were diminished by a huge margin in the FY20-21. People needed a secure financial tool to support their day-to-day needs. Due to their limited liability and low interest rates, gold loans put less burden on your pocket and relieve you of any stress to pay back the amount. Banking experts say that if the viability of a business does not provide any clarity, even small businessmen should take a gold loan to meet routine payments and working capital requirements.
Although safe and convenient, there are a few things to keep in mind while applying for the loan:
1) Valuation of gold is what determines the loan amount
The loan amount that is ultimately authorized will depend upon the current value of the gold. The more the purity of the gold, the higher it will be valued which is directly proportional to the loan offered. To be entitled for a loan, the gold pledged must have a purity between 18-24k. Gold jewelry pledged with any precious or semi-precious, stones or other metals will be considered after deducting the elements. Loan amount received will only be considered against actual gold in the asset.
2) Be sure of the lender’s credibility
The lender with whom the gold is to be pledged as collateral, should have verified credibility and reliability. Make sure that the vendor is verified and can be trusted before signing up for the loan. Never approach jewelers or small shops for gold loans, they are likely to be unregulated and their terms and conditions might be unfavorable. They have questionable credibility and you’re likely to get scammed and there is a possibility of them being frauds. Be aware and choose a certified financial institution that you can trust. For instance, IFL is a secure and verified lender and the security of your funds is our top priority. You can be sure that your gold will be safe with a reputable institution like us.
3) Picking between banks and NBFCs
When it comes to picking a trustworthy lender, there options are generally two-fold from which you can choose. You can avail the gold loan either from a bank or an NBFC (Non-Banking Financial Company).
NBFCs could be more copious when it comes to assessing your gold, and the process too is swift, simple and hassle-free. But on the other side, interest rates offered by NBFCs incline towards the higher side as compared to those offered by banks. Some banks, however, like IFL, not only offer Gold Loans at lesser interest rates but also guarantee a minimal and forthright documentation process and transparent charges.
4) Carefully examine the repayment options
Another vital aspect is the repayment option, and there are a few options that you could consider:
Bullet payment: Here, the loan repayment amount is estimated according to usual standards monthly, but you pay the total sum, plus the interest at the time of maturity of your loan period. This is a suggested option if cash flows are low initially, but you are assured that things will pick up and concur with the end of your loan tenure.
At IFL, Our Gold Loan officers shall be happy to assist you in quick and transparent processing of the transaction. Not only this, we offer highest value of your gold and lowest interest rates.
While your gold stays safe with us, you can go ahead and take advantage of every opportunity.
While other loans require income or salary proofs and several other documentations, Gold Loan at IFL requires minimum documentation and ensures quick and easy disbursement. Simple. Safe. Secure. Your financial needs, covered at IFL. Contact us now!