6 Situations In Which A Gold Loan Can Come In Handy

Business

When you have gold which is idle, the only best way in making it useful to fulfill and meet all your financial needs as well as emergencies is through a Gold Loan. And here are ways in which they will come for your rescue in your tough times.

When you have a sudden and unexpected shortage of funds that will put you in an untimely end to a favorable business prospect. In other worse situations, this can even halt a medical emergency or medical attention which can be of an emergency or crisis. During this time you will try to reach out to every possible option of making money meet your demands or needs. This shortfall in funds can make you go blank during these situations. But you are obvious to forget the most efficient liquid asset- Gold.

This yellow piece of metal can be the precious and most valuable financial resource that you can wish for in these situations. Financial associations such as Banks and NBFCs non-banking finance companies will offer you valuable loans against the value of the gold you possess as collateral. When you fail to repay the loan or default on repayment, the bank or the financial institution where you availed the gold loan will sell the pledged gold in order to recover the loss or dues by you. The advantage of availing a loan against gold is that you can use the money borrowed through the loan for anything that is not illegal or speculated.

 

There are a few purposes or needs for which you can avail or seek a loan against your gold for:

 

  1. For Business– A shortage of liquid money or funds can put your business plans and ideas on hold. It can be from expanding your business venture, starting a sub-venture, purchase of new equipment to develop your business or it can be even expanding your business space. There can be a delay in the release of funds from someone, insufficient funds in reserve which can stop you from your emergency needs.

 In such situations, you can approach Banks or NBFCs who offer you gold loans from where you can borrow up to 60-75 percent of the market value for your pledged gold. One can be extremely lucky if that particular period happens to be an all-time high price for the value of Gold.

 

  1. For Education– When your loan application gets rejected for the reason of a low credit score, only a gold loan can come to your rescue. There is a difference from other loans as the gold loan EMI comprises of only interest. When you close the loan, you can make the repayment of the principal amount which can also be done earlier than the scheduled time period.

 This is possible even without the payment of the additional charges. You may have a fear about defaulting risk and it is lessened as your gold is kept with the bank as security. The approval can be done with basic identification proofs and address proofs without the submission of income and employment proofs.

 

  1. For Healthcare– Out of all the reasons and needs, an unfortunate and unexpected medical emergency is always very tough in sudden situations. The medical insurances that one applies do not cover-up all the expenses during a medical emergency and being out of cash is not an easy option for all. 

When treatment is needed to be done immediately, a gold loan can only be your best bet and it comes in very less approval time with minimal processing and fast disbursal of funds. Once you apply, the bank will begin to value and estimate your gold so that it can disburse the money while you wait immediately. Within hours, you can easily be paying for the medical expenses of the life-saving treatment.

 

  1. For Wedding– When you are planning for your wedding which would have been your dream, you will not let anything hinder that big day. When the day nears, you may easily run out of cash or funds to make some plans a question mark. That is when you will realize the failure of having a budget allotted for some key plans. You can make use of your Gold that is not important for the wedding ceremony as collateral for your financial expense for that plan.

 

  1. For Down payment– When you plan to buy a car, house or a home appliance, there are some specific expenses that cannot be provided by it. Many of you will try to swipe your credit cards, try to avail of a personal loan with higher interest rates which will be a loss for you in many aspects. 

Instead of those, you can avail of a loan against your gold to meet those expenses. The interest in Gold loans is much lower when compared to every other option available. They are also sought for tenures or a period of time varying from a few weeks up to a year.

 

  1. For Travel– There may come a time when you will be very much set or planned for an exotic vacation abroad which might cost you high. When the date nears, when there is a situation in which you are supposed to carry cash with you apart from the funds or cards or even to cut down your credit card usage, you can approach your bank with your gold for an easy loan against your gold. This will end your worries of cash crunch for your planned trip and also give you easy and quick access to funds.

 

There are various interest rates and also the value for gold varies from one bank to another including the NBFCs. The NBFCs usually offer better benefits and higher value for the gold and many people do opt for that during the gold loan. There is a saying that it is worth the weight in gold and every piece of it is valued. 

 

You may have a sentimental attachment towards your gold and it may make you think twice before using them as collateral for the loan. But the truth is, this type of loan will be the only way to make the best use of your idle gold and give it a new lease of life by making it an economical and also an easy source for all your short term funding plans.