Gold loans for short-term purposes can prove to be worth cost-effective in the case of clients who do not doubt their repayment capacity; else, the same borrowed at high rates of interest can be stressful. Hence the most common query in the present-day world of funds and loans is that ‘Is it correct to consider Gold Loan as a Viable Option to Consider This Year ‘.
The answer to the same is that economic instability has been at its peak since two dreadful years of the pandemic. The uncertainties have been so panicking, and on top of it, the financial crises faced during these (near to jobless) years have been awful and disheartening. These situations have made gold loans the viable and the best-suited option to meet your needs and financial requirements. Job losses, working capital requirements, health emergencies etc. have been the root cause of the critical crisis during the pandemic years.
Under this fragile fragment of life and death, the gold loan was the only in-hand option left with the common man to accommodate his expense requirements. Let’s look at how it is beneficial for fulfilling financial needs and why it is the most trusted option this year.
Advantages of the gold loan option
- Cheap and best: Cost-effectiveness being an important feature of the gold loan makes it convenient and a favourite of the borrower, and being a type of secured loan, it suits the lender as well. The option of gold loan has low or fixed rates of interest and doesn’t care about credit score etc., as is the case with another type of loan. This is because a gold loan is a form of secured loan, and the lender is sure of retrieving the same. With the soaring prices of the commodity (gold) during the pandemic situation eventually, the amount of loan was varied in accordance with the gold rate.
- Term of repayment: Though previously, the gold loan was normally offered for a period of one year, it has been revised, and the period has been expanded to three years considering the tough pandemic requirements. The financial institutions are even coming up the easy EMI payments options.
- Quick approval and instant loans: The facility of gold loans requires minimal paperwork and a waiting period. This makes the process quick and instant. All that is required is the evaluation of the gold value (offered as security) by the lender, and once the same is done, the loan is sought to have been approved. The relative feature usually makes it perfect for sudden emergencies, and that makes it a viable source of funds in these hard times.
- Easy repayment options: The gold loan providers/lenders are ever ready with easy payment options for their clients and thus are making efforts to support the group. These types of loans come even with the EMI repayment scheme, which allows small and even payment of the loan amount. With the rise in demand for the same, lenders are even offering a certain rebate on monthly payments.
It should be noted that a gold loan is a type of secured loan, and in case of defaults in payments, the lender is truly acknowledged to take possession of the gold asset offered as security.