One of the popular loans in our country is a gold loan because they are easy to obtain and require basic documentation. Moreover, such loan types offer a quick and immediate source of funds for emergency situations, as it is disbursed within a few hours of applying.
Nowadays, availing such a loan is super easy if you download the right application on your smartphone. Moreover, the credit score here isn’t checked, as the gold is kept as collateral.
What is a gold loan?
It is a type of secured loan that uses gold as collateral. In this loan type, a borrower pledges their gold ornaments, coins or bars as security in exchange for funds from a lender. Here, the loan amount disbursed by the lender is usually a percentage of the gold’s current market value.
This loan type is quite popular in India and other parts of the world, where gold is a common asset. These loans are often used for short-term financial needs, such as medical expenses, education, or urgent home renovations. Furthermore, they are also a common source of funds, especially for small business owners.
The rate of interest on gold loans is lower than other types of unsecured loans, such as personal loans. This is because the gold here acts as collateral, reducing the lender’s risk. Moreover, they usually have a shorter repayment period than other types of loans, ranging from a few months to a few years.
What are the benefits of using a gold loan app?
With this app, you can easily apply for a loan from the comfort of your home without having to visit a physical lender. In addition, the overall process, from application to funds disbursal, can be easily completed online.
The approval process for this loan via an app is usually fast, with many lenders offering instant approval. This means you can get access to cash instantly, which can be useful during tough times.
Lower rate of interest
Gold loans have lower interest rates than other types of loans, as gold serves as collateral. This helps in saving money on interest payments over the total tenure. It is advisable to use a gold loan calculator before availing this loan.
Many applications, such as Bajaj Finserv, offer flexible payment options, allowing you to choose a repayment plan that suits your needs. You can also choose to make part-prepayments or even foreclose the loan without any additional charges.
No credit check
Since this loan type is totally secured by gold, they don’t require a credit check. This basically means you can quickly get a loan even if you have a low credit score or no credit history.
How to avail this loan?
Around four months ago, I planned to avail this loan to facilitate my education. I used a gold loan calculator online, the one the Bajaj Finserv application offered, and calculated everything. Here is an easy step-by-step guide on how to get it:
- Download the Bajaj Finserv app
- Sign up with your mobile number
- Tap on Gold Loans under the ‘Products for you’ section
- Proceed further