What types of people are the people who apply for gold loans? The other questions will naturally come if we respond to this one.
More than 80% of India’s workforce is employed in the unorganised sector, which includes drivers, carpenters, electricians, plumbers, and other tradesmen. They will not have a stable or predictable income if they work in the unorganised economy.
The bulk of the time, they are compensated in cash (not in bank accounts). As a result, they are unable to provide proof of income. A personal loan, like any other loan, demands substantial documentation and stringent credit requirements. As a result, not having proof of income makes it difficult to obtain a loan. Obtaining a gold loan, on the other hand, is more simple.
All you have to do is submit your address and proof of identity to get a loan on the gold ornament. There are no income statements, ITRs, or other tax forms necessary. This facilitates people’s lives.
What Are the Advantages of a Gold Loan?
Gold loans, as secured loans, typically have lower interest rates than other financing choices such as personal loans, home loans, or other secured loans.
There are no limitations on how the cash can be used.
Because the end-use of the funds obtained through this loan is not monitored, you have the freedom to use the funds for any type of need, such as house repairs, further education, wedding expenses, or any medical emergency.
It is not necessary to show proof of income.
Because the loan is secured against gold, financial institutions rarely require applicants to provide proof of income or wages. As a result, whether you are working or self-employed, you can apply for a gold loan.
Because gold loans are guaranteed by genuine gold, they have fewer eligibility requirements and require less documentation. This allows lenders to process loans more quickly.
Option to pay only interest
Gold loans have a unique feature in that the borrower can pay only the interest portion of the loan throughout the loan term and the principal amount after the loan is paid off.
Liquidity at any time
Gold loans are often known as “ATL” loans, which stands for “anytime liquidity.” This implies that, unlike other lending choices, you can get a loan in less than 30 minutes without having to fill out a lot of paperwork. This tool allows you to acquire a quick gold loan if you need one.
For gold ornaments that you submit as collateral, the banking institution provides triple-layered security. Your gold will be kept safe in their vault during the process, and you will receive your gold jewellery once you have paid off the loan in full.
There is no processing cost
One of the most appealing aspects of gold loans is that there are no processing fees. As a result, such loans are the most advantageous.
In summary, getting a gold loan has a lot of advantages and can help you out in times of need. The nicest part with gold loans is how quickly they are disbursed, how little paperwork is required, and how simple the paperwork is, which is not the case with other loan options.