If you want to buy the home of your dreams but don’t have the necessary funds, a gold loan is an easy and affordable way to achieve your goal. This type of loan is secured by your gold jewelry or ornaments and can help you finance your dream property without a lot of paperwork and a long credit history.
Gold loans are also a good alternative for those looking for a low-cost, Short term loans UK to meet urgent financial needs. These loans can be used to fund an emergency medical bill or cover a hefty repair charge on a car. They can even be used for business expenses or other larger projects, allowing you to use one lump sum and pay it back over time in fixed monthly payments.
The amount you can borrow depends on the value of your gold and the lender’s minimum and maximum loan limits which can be checked by a gold loan calculator. Lenders will usually have an eligibility calculator to determine your loan amount.
Faster processing: Since gold is considered a secure asset, banks and other lending institutions tend to disburse these loans quickly, which is an added convenience for borrowers.
Interest-only option: Another benefit of gold loans is that they often offer an “interest only” option, meaning you can pay only the interest part while repaying the loan. This is especially useful for those who need to refinance their existing personal or business debt, because the interest on gold loans is often lower than other options.
Tax benefits: If you are taking a gold loan for your business, you may be eligible for tax benefits under sections 24 (b) and 80C of the Income Tax Act. This means that you can claim the interest expense on your gold loan while filing your tax returns, reducing your overall tax liability.
No foreclosure charges: A popular benefit of gold loans is that they do not come with the high-interest rates and foreclosure fees typically associated with other types of personal, auto or home loans. This makes it a great choice for people with weak credit scores who want to avoid paying extra on interest and late payment charges.
Repayment flexibility: Most gold loans are repayable in 12, 18 or 36 months, depending on the loan tenure. This allows borrowers to tailor their repayment schedules to fit their budgets.
Limitation on loan amount: While most lenders will allow you to borrow up to 75% of the value of your gold, this may not be enough if you need to borrow a large sum. This can be an issue if you need a substantial amount of money to purchase your home or to start a new business.
Potential for hidden charges: While most gold loan lenders don’t charge any processing or valuation fees, some may have additional costs attached to their service. Some may even require a guarantor.
When you apply for a gold loan, make sure that you have the necessary documentation and a clear understanding of what your lender requires from you. This will ensure that you receive a fair and competitive loan offer. You should also consider the reputation of the bank or lender before deciding to submit an application.
