In the last couple of years, gold loans have come under the spotlight for all the right reasons. It is now being counted among the most popular financing options in the lending sector due to its borrower-centric traits and organised structure.
Accordingly, the secured financing option has found wide application in meeting sizeable requirements, including sponsoring higher studies. So, with more individuals now willing to take out a gold loan to fund their studies, should you consider the same?
Take a look at the factors discussed below to understand how and why a gold loan could be a suitable option for higher studies.
Reasons to Take Out a Gold Loan to Fund Higher Education
These pointers highlight the reasons that make a loan against gold viable to finance higher studies.
● Simple eligibility criteria
When compared to an education loan, a gold loan comes with less stringent eligibility criteria. To elaborate, an education loan not only weighs in the applicants' repayment capacity but also factors in the merit of the student in question.
● Easy documentation
When it comes to taking out a gold loan, applicants do not necessarily have to submit a list of documents such as income proof, income tax returns, and proof of employment, among others. In fact, to apply for a gold loan, submitting basic documents that serve as proof of your identity and address would suffice. This simplifies documentation significantly and makes the process of verification quick.
● Restriction-free usage
Pursuing higher studies, especially in a foreign university, is quite expensive. However, such expense is not always limited to college admission fees.
If one decides to pursue higher studies in a foreign university, the student also has to bear the cost of travel, food, lodging, alongside tuition fees.
Unfortunately, most education loans do not cover these major ancillary charges as they have rigid end-use restrictions. However, there are no such restrictions on how one can use the sanctioned amount when it comes to gold loans. This makes it possible for students to account for their college fees, allowing them to go bear the cost of living in a different city or country with ease.
● High loan to value ratio
Gold loans come with a high loan to value ratio, allowing borrowers to meet their financial requirements with ease and without taking out additional small ticket loans. As a borrower, you can avail up to 75% of collateralised gold's value as a loan and account for education expenses with ease.
● Doorstep facility to avail loans
Leading NBFCs make gold loans a better option to finance higher studies by simplifying the application process further. For example, SBFC has started the Gold Genie facility to benefit applicants and make gold loans more accessible. In the said process, individuals can apply for a gold loan from the comfort of their home as the NBFC extends a doorstep facility to initiate the application and documentation.
● Quick disbursal
Easy application and minimal documentation allow NBFCs to disburse the sanctioned loan amount quickly. This enables borrowers to account for their financial requirements without any delay. Typically, SBFC takes only 15 minutes to disburse the approved loan amount to keep the borrowing process short and simple.
● Easy repayment terms
The simple repayment structure that accompanies gold loans further adds to its merit. Borrowers get repayment options such as interest-only payout, EMI payment, and bullet payment to clear their debt within a tenure of their choosing.
Furthermore, NBFCs like SBFC extend flexible repayment tenure of 2 years and allow borrowers to choose from multiple repayment options such as IMPS, NEFT, UPI, cash deposits, and virtual payments.
Conclusion
Leading financial institutions have made education loans accessible to tap into the growing demand for funding higher education. However, while education loans are a viable option to fund higher studies, they come with a barrage of stringent requirements that often make it difficult for students to avail them.
For example, only those accepted in recognised universities and colleges of specific locations are considered eligible for an education loan. In addition, most education loans do not cover expenses such as cost of living, accommodation, stationary charges incurred while pursuing higher studies abroad.
Education loans also require applicants to assign guarantors or coapply with parents to avail funds. All these pointers make the process of financing higher studies cumbersome.
Fortunately, you can easily avoid these hassles by opting for a loan against gold ornaments and making your borrowing experience smoother.
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