There are times when our financial stability goes out of balance. In such a situation, taking a gold loan can be a viable option. A gold loan offers a credit amount by giving gold ornaments as collateral to a reputed bank or non-banking financial company (NBFC) for the duration of the loan.
By using a gold loan interest calculator online, you may quickly determine the interest rates being offered with different gold loans.
Following are four reasons why taking a gold loan is ideal for an emergency situation:
1. Easy Eligibility Criteria
You can easily get a gold loan mainly because its eligibility criteria are not very stringent. For instance, while taking some other type of loan, you have to meet the monthly income requirements and maintain a good credit score. However, the most important requirement for getting the gold loan is having pure gold and a few mandatory documents.
2. Minimal Processing Time
In times of emergency, people require funds on immediate basis. The application process is very simple as the document requirement is minimal for a gold loan. After you have submitted the gold to a loan provider, its evaluation is done, and immediately after that you receive the loan amount.
3. Reasonable Rate of Interest
Gold loans are available at a reasonable rate of interest, making them perfect for emergency situations. Because these loans are secured by nature, the lending risk for a loan provider is lower, allowing for reasonable interest rates. This low interest rate keeps you stress-free because a bank or NBFC does not put any strain on your overall finances.
4. Repayment Flexibility
One of the best things about taking a gold loan is that the borrower gets flexibility while repaying the loan amount. You can choose to pay the interest only and pay the remaining amount at the very end of the loan tenure; it is up to you. Due to these reasons, a gold loan makes for a reliable option for emergency situations. You can easily apply for the loan and repay the amount at your preferred pace.
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