Why Taking Out a Gold Loan Is Better Than Selling Your Gold

The Covid-19 outbreak significantly damaged India's economy. Many people lost their jobs or had their salaries reduced, and many businesses experienced significant losses and even closed down as a result of the capital shortage.

Those who made it through the tide or who own enterprises now face an uncertain future. They have used up all of their extra cash and are now looking for new sources of funding to cover both regular expenses and unexpected emergencies.

Unsecured loans are those taken out without any kind of security. Even though it's a great way to acquire cash right away without putting up any assets, not everyone qualifies for a loan of this kind. Furthermore, these loans have quite high-interest rates.

Secured loans are borrowings made in exchange for a pledge of property. While a person may take these loans against their home, equity stocks, or FDs, a loan against gold is the most reliable and popular alternative.

To solve the current economic crisis, one should seek a loan against gold rather than sell it to cover demands. Let's first grasp what a gold loan is and how it differs from selling physical gold before we look at its advantages.

What is a gold loan?

A gold loan is a secured loan offered by financial organizations in which the owner of the precious metal commits it in exchange for a specific sum of money against its market value.

Why should you choose a gold loan?

You retain ownership of your priceless item if you take out a loan against it. You receive the gold items back from the lender's custody after paying off the entire loan sum. When you promise a family treasure or jewelry given to you by loved ones, this becomes more important.

Selling these items results in not only an emotional loss but also a financial one (because one receives money equivalent to the value of gold without incurring any costs).

You can easily take care of your immediate financial demands by getting a gold loan, and if your financial condition improves, you will reclaim full ownership of your asset.

Benefits of taking a gold loan

Loan available at the doorstep:- Selling gold requires a lot of effort. Find a trustworthy buyer who is prepared to make the right offer. The completion of the transaction could take weeks.

However, obtaining a gold loan is a straightforward procedure. Companies like Muthoot Finance offer gold loans right to your door. After you submit a request for a gold loan, a loan manager comes to your home with the necessary tools to weigh and purify the gold.

A request for approval is created in accordance with the assessments and appraisal. Once authorized, the loan money is sent within 30 minutes to your bank account. Once the money has been collected, the loan manager collects the gold items that were pledged.

High loan to value ratio:- One of the main advantages of a gold loan is the high loan-to-value ratio of the credit obtained against the pledged asset. Users now have more financial freedom because they can use the large loan amount they obtained to cover a variety of other outstanding debts.

Minimal documentation:- In contrast to other loans, gold loans do not require a lot of paperwork. To finish the registration procedure and submit an application for a gold loan, you only need to supply KYC documentation.

Affordable interest rates and convenient payment options:- When compared to other secured or unsecured loans, the interest rate levied against gold is quite modest. In comparison to buying the debt or selling gold, it is, therefore, a more cheap option. Even paying back the loan balance is simple to do. Users of NBFCs have the option of paying only the interest each month or making sporadic partial payments to lower the total amount due. The gold is returned to users after the closing payment has been made.

Strong security features:- Even pledging your gold could cause you sleepless nights as you worry about its safety while selling it might be your only option. NBFCs provide a strong security mechanism to address these worries, ensuring that the gold removed from your location is kept in a GPS-traceable bag and deposited in a guarded locker.

Gold is consistently regarded as a reliable investment. It not only increases in value with time, but it is also simple to sell when one is in need. Indian households have long invested in gold through jewelry, coins, and other forms in the hopes that their investment will increase significantly over time. But frequently, one must sell their beloved property in order to meet urgent necessities owing to uncertain financial conditions, a lack of liquidity, or other considerations.

One can now obtain immediate financial relief even while preserving ownership of their gold thanks to the gold loans provided by NBFC. We are industry pioneers in providing gold loans with flexible payment choices at low-interest rates right to your door. We have expansion plans for tier-2 and tier-3 communities, and we are now operational in all the main urban areas.

Our safe lockers guarantee that the gold promised is kept securely in a cutting-edge system that is watched over around-the-clock. Consider storing your gold investments or decorations in our safe vaults for convenience and security if you are concerned about their safety at home.