Gold loans have become an extremely popular way for individuals to access short-term funds in times of financial need. A gold loan is a secured loan where gold jewellery or gold ornaments are pledged as collateral with a financial institution.
With the growth of digital financial services, applying for a gold loan online has become very convenient. In the sections below, we'll discuss the advantages of gold loans in detail.
Advantages of Applying for a Gold Loan Online
Some of the significant advantages of gold loan online are:
1. Convenience and Accessibility Anywhere
One of the biggest benefits of an online gold loan is that customers can apply from absolutely anywhere at any time. Borrowers need not take time out to visit a financial institution during working hours and can directly apply online, even late at night or early morning, through a laptop, smartphone, or desktop, as per their convenience.
2. Speedy Processing and Faster Approval
Minimal documentation requirements online with only basic KYC make processing very quick. Once borrowers fill out the online application and upload the required documents, the approval happens within a few hours as eligibility verification is digital. However, you may have to visit the nearest branch of your financial institution or opt for a doorstep verification of your gold articles. As soon as the loan is approved, the amount applied gets immediately credited to the linked bank account, highlighting the advantage of applying for a gold loan online.
3. Potential for Lower Interest Rates
One of the most attractive benefits and advantages of gold loans taken online is the lower gold loan rate offered by digital lending institutes. As online companies do not have the overhead costs of maintaining physical branches, they can pass on some savings to customers through lower rates.
4. Increased Flexibility of Repayment
Online gold loan services provide flexible repayment options based on the borrower's cash flows. Customers can choose to pay only interest in EMIs through the loan tenure and repay the principal in one go at maturity. Alternatively, they can also opt for part prepayments of some principal outstanding along with interest instalments, showcasing the flexibility that comes as an advantage when you apply for a gold loan online.
5. Greater Transparency
The entire lifecycle of an online gold loan, from the application stage to documentation, approval status, disbursal amount, tenure, applicable charges and payments made, can be self-tracked by borrowers through their secure login on the portal.
6. High Degree of Safety and Security
Reputed gold loan providers employ the latest encryption and other security measures to keep customer data safe and enable technically secure transactions on their portal. Each stage follows stringent safety protocols, from logging in to the portal to linking bank account details. Some portals also provide facilities for secure storage of the gold jewellery pledged with them throughout the loan tenure, so borrowers need not worry about the safety of their ornaments.
7. No Negative Impact on Credit Score
This is a huge positive, especially for borrowers with multiple loans, such as home loans, auto loans, etc. Availing an additional online gold loan will not impact their credit score or profile in any way, as it is a secured loan fully backed by gold collateral. Even for others, the CIBIL score will not be affected by taking an online gold loan. This makes it an attractive financing tool for all customer segments. However, missed gold loan EMIs can bring down your credit score several points.
Who Can Benefit from Online Gold Loans?
Some profiles of applicants who can greatly benefit from the convenience and fast processing of online gold loans include:
Self-Employed Individuals
Due to fluctuating income, self-employed persons like traders, retailers, business owners, etc., often face urgent working capital requirements. Taking an online gold loan allows small business owners to get funds in their account within a few hours to manage inventory purchases, vendor payments, etc., without liquidating assets.
Small Business Owners
Entrepreneurs can leverage online gold loans as a source of capital for business expansion plans, setting up a new production unit or managing sudden bulk orders. Using owned gold jewellery as collateral, small enterprise owners can fuel growth plans without undergoing lengthy paperwork or credit checks.
Salaried Professionals
An online gold loan can financially empower salaried employees who may face personal emergencies like medical treatments, children's education or family events. It allows them to arrange substantial funds instantly without impacting their credit profile, reinforcing the advantages of gold loan.
Conclusion
Online gold loans offer many advantages of gold loan compared to traditional loan providers in terms of convenience, quick processing, lower gold loan rates, and repayment flexibility. Customers can avail funds in less than 24 hours while retaining ownership of their gold jewellery. With minimal eligibility criteria and documentation, online gold loans efficiently meet the urgent financial needs of individuals and business owners. The digital processes and platforms also ensure complete transparency and safety of transactions. Considering the benefits, applying for a gold loan online is an attractive avenue for quickly generating funds.
FAQs
1. What are the benefits of taking a gold loan online instead of visiting a branch?
Applying for a gold loan online offers significant advantages of gold loan in terms of convenience, faster processing, possible lower gold loan rates, and repayment flexibility. Disbursal also happens faster and is directly sent to your bank account.
2. How much loan amount can I get per gram of gold through online mode?
Most online gold loan providers offer up to 75%* of the value of your gold as loan amount. For example, if the current market price of 1 gram of your gold jewellery is Rs 5,000, you may get a loan amount of Rs 3,750-4,000 per gram by pledging it online.
3. What are the eligibility criteria and documents required for an online gold loan?
Eligibility involves ages between 18-75* years in most cases, however, the range can vary with different financial institutions. Documents required are minimal, including ID proof, address proof, passport size photos and a copy of the PAN card. The process is convenient compared to other loans requiring extensive paperwork.
4. How can I get the best gold loan interest rate online?
Compare interest rates offered by various financial institutions to get the best deal. Shriram Finance offers a paperless and seamless gold loan process and offers a loan amount up to 75%* of your gold's value.
