If you are in urgent need of funds and have gold ornaments lying around at home, then you should consider using the valuable metal as collateral to obtain the necessary financing. Gold loans are offered by numerous financial institutions across India. The lender will simply assess the market value of your gold and determine the loan amount to be available to you in accordance with its accordance. Gold loans are a form of secured loan and come with a variety of advantageous features.

What Exactly is a Good Loan?

A gold loan is a widely popular secured loan that allows you to leverage the value of gold ornaments, coins or bars you may have to obtain funds. It is a hassle-free and swift way to acquire funds while also ensuring the safety of your valuable assets. As opposed to unsecured loans, gold loans are backed by collateral. As a result, they often have lower interest rates, which makes them an attractive option for discerning types of borrowers. You can use a gold loan amount to finance any expense and do not have to worry about any end-use restrictions.

Flexibility in Repayment

Repayment terms for gold loans are usually quite flexible. You will have the freedom to tailor the repayment schedule to your specific financial situation. This will help make sure that you can comfortably repay the loan without straining your budget.

 Lower Interest Rates

Being a secured loan, gold loans generally have lower interest rates in comparison to unsecured loans, such as personal loans or credit cards. As your gold ornaments or coins will act as collateral for the loan, the lender’s risk shall be reduced. Lower interest rates will reduce the overall cost of borrowing. This makes gold loans an advantageous way to avail yourself of the funds you need urgently and with ease, without having to deal with the burden of high-interest repayments. These loans are ideal as a short-term financial solution, as they allow you to repay the loan relatively fast without accumulating excessive interest.

Minimal Documentation Hassles

In comparison to many other types of loans, like business loans, education loans or even home loans, the documentation necessary for gold loans is pretty much minimal. You just have to submit a few basic documents along with your loan application. Not having to bother with extensive paperwork saves you time and effort and makes the loan application process smoother and quicker.

Quick Processing and Disbursal

There can be situations in life where you need funds urgently, like having to do emergency renovations at home, paying your child’s university fees, or experiencing cash flow issues in business. Gold loans are popular for their speedy processing and disbursal. They ensure that you get the needed funds in time.

Gold Loan Amount

There are a number of factors that impact the loan amount that you get against the gold ornaments pledged with the lender, including the purity of gold used to make the jewellery. The rate of gold per gram on the specific date will also impact the loan amount. For one gram of gold, you are likely to avail of a loan amount equivalent to 75% of the market price of the metal on that particular day. Hence, prior to applying for the loan, checking the gold rate today online will be a good idea.

Checking Gold Loan Per Gram

The gold loan per gram rate basically implies the sum of money a lender is willing to provide for every gram of gold you pledge as collateral. This rate varies on a daily basis, as per the current market price of the loan. Hence, before applying for a loan, checking the gold rate today becomes extremely important. Factors like the purity and demand of gold, as well as the policies of the lender also impact the loan amount and interest rate.

Lenders consider the prevailing market price of gold to determine the gold loan per gram rate. The loan sum you will receive is a percentage of the value of gold, also known as the LTV or loan-to-value ratio.  The higher the LTV ratio, the larger the loan amount you can receive. In India, the majority of lenders provide an LTV ratio of up to 75%.  This basically means you can borrow up to 75% of the current market value of the gold as a loan.

Wrapping Up

Gold loans are a smart way to meet urgent financial requirements, like paying for your kid’s higher education abroad, starting a new business venture, renovating your home, and more. Unlike other secured loans like a car loan or home loan, there are no restrictions on the end use of gold loans. Hence, they are among the most effective means to fulfil a sudden requirement for cash. There are several lenders across India that offer such a loan.

Prior to applying for a gold loan, you must check the gold rate today. The latest market rates for gold loan per gram will help you understand how much you can borrow based on the value of your gold ornaments. To get the best deal possible, it would be smart to compare rates from several lenders.