A Gold Loan Is Now Possible

The value of gold has been on a steady rise for the past few years. Many are now recognizing gold as a device to obtain loans. Many have now realized that they can use this precious gold to obtain loans at affordable rates from the bank. Instead of applying for a personal loan which charges a high rate of interest, one can simply apply for a loan against gold. In this type of a loan, the borrower provides the bank with gold as security. When the loan has been repaid in full, the bank will return the gold to its owner.

Some features that make this type of loan stand out are:

•  It is a secured loan as the gold is deposited in the bank as security.
•  The repayment tenure of a loan against gold is shorter and can extend to a maximum of 12 months if required.
•  The interest rate charged is much lower than that of a personal loan.

The reasons why one must opt for a gold loan are:

•  The processing time is less and the application requires fewer documents from the borrower.
•  The interest rates are extremely favourable for the borrower.
•  There is a provision which allows the borrower to only pay the interest charged each month. The principal amount in such a case can be paid when the tenure ends.
•  The gold is generally lying idle in storage. A loan against gold allows an individual to raise money by making use of the gold they own.

Nowadays, affordable Loans against gold are now available. When applying for a loan against gold, the business will only provide the borrower with 80 percent of the value of the gold. The reason why the interest rate charged is so low is due to the fact that security is being provided. Gold is an extremely liquid commodity. An individual can make the most of it by using it to apply for a loan to meet any immediate financial requirements. Also, since most people love their gold items, chances of a borrower defaulting on such a loan is extremely slim.