Go For Gold Loans To Meet Financial Emergencies

You are planning to start a business and are in need of instant loan. You don’t have a job either and in this kind of a situation, it is quite difficult to get approved for a personal loan from the bank. So what can you do? Gold loan is a ready solution you can opt for.

Understanding Gold Loans

Gold is recognized as one of the most precious metals that can help you to raise money at any point of time as per your need. Be it for starting a new business or buying an apartment, you can proceed with gold loan to add colours to your dreams. Today a large number of banks and financial institutions are readily offering this facility to the customers who meet the standard set for being eligible for the same.  All that you need is a good credit score. But what does gold loan mean? Under this type of loans, you need to give your gold to the bank as collateral security against the amount you want as loan.

Banks and other financial institutions readily offer this type of loans as gold can be liquidated easily upon repayment failure. But do take a note that gold loan does not stand for selling off your gold. Rather it stands for keeping the gold ornaments as a security which you will be able to take back from the bank once you repay the loan amount raised. Given the love that women usually have for this metal, gold is truly one asset on which you can rely for generating funds as needed during emergency.

Is Gold Loan Short Term Or Long Term Loans?

Gold loans are generally short term loans, whose tenure span from 10 months to 1 year usually (if the loan is raised for non agricultural use). There are even some banks which provide gold loans for a time span of even 36 months also. Since gold loans are solely short term loans, you need to be sure of your credit worthiness. You should opt for this loan only if you can repay the same within this period. Failing to repay the loan on time will result into liquidation of your gold.

If thinking of whether there is restriction on the usage of money received as gold loan, the answer is no. You can use it for any purpose- be it for your business or buying a new car or new home or for meeting any emergency financial need.

How Can You Repay Your Gold Loan?

The repayment structure of gold loan usually depends upon the lender. Most of the banks as well as the non banking financial units permit repayment of gold loan via EMI i.e. equal monthly instalments. However there are some banks which also allow repayment of the entire loan amount right at the end of the loan period. In such situation, the borrower has to pay the loan interest on a regular basis. It is only the principal amount that can be paid at one go. And also once you clear off the loan amount, you get back your jewellery.

Concluding Note

So if you are in sudden need of money but don’t want to opt for a personal loan, go ahead with gold loan facility and enjoy its benefits.