Benefits of taking a Gold Loan

Gold Loans are among the finest options for getting funds against your gold. This allows you to raise funds for your financial needs without selling the gold you own. Gold Loans are easy to acquire, don't require a perfect credit score, and have relatively lower interest rates. Let's understand various Gold Loan benefits in detail.

Advantages of a Gold Loan

Immediate capital

Gold Loans are secured loans and can offer funds immediately. The eligibility needs are quite simple, and banks usually take a day or two to approve the loan application. Once done, the amount will be disbursed immediately.

Axis Bank, for instance, provides Gold Loans with same-day loan disbursement. You can get a loan for amounts ranging between ₹25,001 and ₹40,00,000 at competitive interest rates and flexible repayment periods. You can pledge gold jewellery or coins issued by banks.

No external collateral

The amount of your Gold Loan is based on the value of your pledged gold. Banks don't ask for any external collateral apart from gold.

No end-use restrictions

Banks place no restrictions on how you can use your Gold Loan funds. You can use the money for buying home appliances, travel, weddings or any other expense. This is one of the most attractive Gold Loan benefits.

Added liquidity

A Gold Loan can be a great way to use your gold ornaments for liquidity. You can raise liquid cash to meet multiple financial needs without selling your gold in the market.

Online application process

You can apply for a Gold Loan online, from the comfort of your home. There is no need to visit the lender multiple times and submit physical paperwork.

Minimal documentation

Gold Loan documentation needs are quite minimal. You just need to share the basic KYC documents to get the application started. This saves time and ensures you get quick disbursal.

Gold Loan tax benefits

A Gold Loan offers tax benefits based on using a loan. When used for business, construction or home improvement, you can avail of tax exemptions on your loan.

Lenient credit score requirements

This Gold Loan benefit is crucial if you don't have the best credit score. Banks offer Gold Loans based on the underlying security, i.e., your gold jewellery. Thus, you can get a Gold Loan even with a low credit score. However, each lender decides on the minimum credit score required for the loan.

Low interest rates

Gold Loans are secured loans and are thus considered to be low-risk loans. This is one of the reasons that Gold Loan interest rates are lower compared to unsecured loans. This ensures you can manage your EMIs easily with less burden on your existing finances.

Security of physical gold

This is one of the most important Gold Loan advantages. Gold Loans allow you to borrow money against your gold without selling it. At the same time, your gold is completely secure with the bank. The lender also adds a layer of theft insurance. Once you repay the loan, you can get your gold back from the lender.

Also Read: 5 ways to manage your Gold Loan repayment

Conclusion

Banks provide up to 75% of the value of your gold as a Gold Loan. Once you repay your loan completely, you can securely get your gold ornaments back. You can enjoy several Gold Loan benefits like lower interest rates, fast processing, online application and lenient eligibility requirements. However, choose a trusted lender who will keep your precious gold safe. Axis Bank can be your partner in this journey, ensuring a seamless and hassle-free lending process.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.