In the last couple of years, gold loans have become a viable option for most borrowers to cater to high-end expenses and account for emergencies.
A gold loan is hands down one of the smartest ways to leverage gold items lying ideally at home to gain access to cash. While using idle precious metal to access funding is a great strategy, that is not the only reason to opt for a gold loan. Several reasons make this funding option a convenient means to resolve financial emergencies.
On that note, let’s check the major reasons to avail of a gold loan for emergencies.
Reasons Why a Gold Loan is Ideal for an Emergency
The following features and benefits of a gold loan make it a viable financing option during emergencies:
1. Easy eligibility
As discussed, gold loans carry lower risks for lenders. This is one of the primary reasons gold loans come with easy to meet eligibility criteria.
● Typically, any adult possessing gold ornaments can access cash through this loan option.
● Applicants’ income and employment status do not bear significant weightage.
● Possessing a high credit score is not a necessity.
The easy to meet requirements allow individuals who do not qualify for an unsecured loan to avail of cash with ease.
2. Quick disbursal
A gold loan is a suitable solution for emergencies as it offers borrowers quick access to funds. For example, an SBFC gold loan is disbursed within 15 minutes of approval. Needless to say, this helps borrowers to account for their emergency requirements without delays.
3. Simple documentation
Simple requirements and minimal documentation ensure quick and timely disbursal of the sanctioned loan amount. Typically, individuals applying for a gold loan from SBFC have to submit:
- Proof of identity
- Proof of address
However, do not forget to check the entire list of documents required for a gold loan from the lender before applying.
4. Low rate of interest
A gold loan is a secured credit option that requires borrowers to provide collateral to the lender, making it relatively less risky. The low-interest aspect ensures that the cost of borrowing is manageable and can be repaid without straining financial capacity.
You can further understand the impact of the gold loan interest rate on the borrowed sum with the help of a loan EMI calculator. Such a tool can prove helpful in determining which loan tenure would be most suitable for you and your repayment capability.
5. High loan quantum
Gold loans provide access to a higher quantum as it depends on the value of the leveraged ornaments. With SBFC, applicants can avail of up to 75% of the leveraged gold item’s value as the loan amount.
Since gold is a precious metal, it is safe to say that the value of gold items would fetch a high loan amount. The high sum of money proves helpful in meeting unannounced expenses without straining current financial standing or dipping into limited savings.
6. Easy repayment option
Gold loans accompany easy repayment terms that allow borrowers to pay back the borrowed sum at their pace after catering to their emergency. For instance, SBFC gold loans offer flexible repayment options to plan and pay off the borrowed sum quickly.
As a borrower, you can choose SBFC mobile app, SBFC virtual account, or website to make payments through RTGS or NEFT. Offline repayment option is also available to borrowers to help them pay off their debt at their convenience. A partial payment and withdrawal facility is also available to borrowers to help them manage their loan accounts easily.
These features and accompanying benefits of a gold loan highlight what makes it a suitable option for emergency funding.
Points to check before applying for a gold loan
Before taking out a gold loan, you must look into a few pieces of information beforehand:
- Whether you meet the eligibility criteria
- The documents required for the gold loan
- Cost of borrowing and processing charges
- Charges on prepayment and partial payment of a loan
- Penalty charges on delayed EMI payment
Having an idea about these will help you understand what to expect from a gold loan and its cost-effectiveness. Similarly, checking borrowing requirements will minimize the risk of getting the loan application rejected or the approval process delayed.
This will not cause unwarranted delays during an emergency and help access funds quickly. Therefore, check SBFC gold loan information in detail and reach out to us to initiate the borrowing process without any confusion.
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