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MERITS AND DEMERITS OF GOLD LOAN




Gold, the precious yellow metal other than being used for jewelry and ornaments can also be used to get a loan at the time of financial emergency. The customers can generate the funds from their assets offered by so many banks and NBFCs. The "Gold Loan from ShubhBank" is one of the easiest ways to access funds when you need them the most. The fund sanctioned to the borrower is generally a certain percentage of the gold’s value. It is referred as a secured loan that a customer takes in lieu of gold jewelry and you can repay it through easy EMIs after which you get your pledged articles back. So if you have a low credit score but sufficient amount of idle gold at your side, then the gold loan can be the monetary solution for all your requirements. Before applying for a loan, you should be aware of its merits and demerits that are discussed below:


MERITS OF GOLD LOAN


• Fast processing: It is a secured loan so includes lenient eligibility criteria and minimal documentation. The lender generally sanctions the loan in few hours and does not even require your credit score for loan approval. The eligible borrower can get the loan money in just few minutes.

• Lower rate of interest: The gold loan charges a lower rate of interest as compared to other unsecured loan products.

• Low processing fees: Many financial institutions levy zero processing fees on gold loan while some of them charge usually a 1% processing fee.

• No credit score: The approval of loan does not depend upon your credit history but the loan amount is decided on the market value of the gold.

DEMERITS OF GOLD LOAN

• LTV ratio: You get a certain percentage of the market value of the pledged jewelry as a loan amount in gold loan. The loan quantum is decided on the basis of LTV ratio and it varies from lender to lender and sums up to a maximum of 80% of the value. For example, if the market value of your jewelry is Rs. 5 lakhs, you can get a maximum of Rs. 4 lakhs as loan money.

• Don’t default; you can lose your gold: If you are unable to repay the loan, then lender has a legal right to freeze your jewelry and auction it to get the outstanding loan amount.

There are various Banks and NBFCs that offer this loan product to their customers with great benefits. ShubhBank helps you to fund your immediate financial requirements with the "Gold Loan at Attractive Interest Rates".

HOW TO APPLY A GOLD LOAN: The loan process varies from lender to lender. Nowadays you can apply the loan online through our official website ShubhBank.com or you can visit our branch for offline loan. At our online portal, you can check your loan eligibility, compare the loan schemes offered by different lenders and can register yourself at our customer portal. After approval, you can get the available credit disbursed in your bank account just in few minutes.

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