Secured Loan Against Gold
There are many nationalized banks, financial companies and private banks offering gold loans at very low rates of interest. The reasons people prefer a loan against gold are:
- Low rate of interest
- Easy interest payment
- No documentation headache
- Quick process in disbursement of money
- Easy to close without any foreclosing charges
- No credit history check ( CIBIL score) to process the loan
- No updates in CIBIL about interest payment delays
Gold loan is considered as secured loan with low interest rate(s). This can be short or long term loan.
Gold loan interest rates vary from 10% to 24%. Interest is payable on monthly, quarterly and half yearly basis. It varies from bank to bank and the type of loan you choose.
People with bad credit or a low credit score can also avail gold loan. No credit history is required for loan against gold.
Loan amount will be disbursed on the same day.
You can close your gold loan whenever you want. Some companies even offer you the flexibility to pay a part of the principal amount whenever you can, and the interest will be re-calculated accordingly. So, you don’t need to keep on paying the same interest till you arrange the full principal amount.
It’s always better to inquire about the available options at different gold loan companies/banks before you opt for a loan and choose the one best suited to you.
- If you have some agricultural land on your name, you can get a gold loan with the cheapest interest rate of 3%. But, this option is available only in the rural banks.
It’s NOT ADVISABLE to take a loan against your gold from private lender(s)/pawn-broker(s) where they charge huge interest rates varying from 24% to 36% or even more. All nationalized banks or gold loan companies will disburse the money within 1-2 hours. So, you don’t need to go to a private lender even in case of an emergency.
You should opt for this type of loan only when you are confident that you will be able to repay your loan amount. Otherwise you will be penalized for not paying off your loan or else your pledged gold will be taken up by the bank or finance company. Thus, before taking a loan against gold, you must ensure that you take a very little amount so that you are able to pay it back.