Collateral Confidence: Understanding the Basics of Gold Loan in Varanasi
Gold, being a precious metal, can prove to be your faithful companion in times of crisis. It is noteworthy that the gold loan in Varanasi is one of the easiest and fastest ways to access funds when it matters the most. Even if you have a low credit score but ample amounts of idle gold in your locker, the gold loan can be the monetary solution for you. In this blog post, Bhumi Finance will be telling you not only about what a gold loan is but also how it works, gold loan interest rates, and other related details. So, read till the very end.
What is a Gold Loan?
The gold loan, also referred to as a loan against gold, is a secured loan that a borrower takes from a lender instead of gold ornaments such as gold jewelry. The loan amount sanctioned to you by lenders is generally a certain percentage of the gold’s value. You can repay it through monthly installments after which you get your gold articles back. Unlike other secured loans such as a home loan or car loan, there are no restrictions on the end use of gold loans. So whether you need to fund a wedding, family vacation, or your child’s education, it is a great way to meet your sudden money requirement. Moreover, a lot of private and nationalized banks along with NBFCs offer gold loans at affordable interest rates.
The entire process of a loan against gold is quite similar to other secured loans. In this, you take your gold articles to a lender along with the required set of documents. The lender evaluates the gold articles and verifies the submitted documents. As per the evaluations, the lender sanctions the loan amount. As per the loan agreement, you pay off the principal amount along with the interest amount and get the pledged gold articles back. The same is the case with a new car loan in Gorakhpur.
Eligibility Criterion
Anyone who has gold can get a gold loan in Varanasi. Unlike personal loans, which include stringent eligibility criteria, gold loans can be availed by any Indian resident, which can include salaried professionals, businessmen, housewives, and even farmers. You don’t even need to have a good credit score to be eligible for a gold loan. So if you have a low credit score, you still have a chance to get funds, provided you have enough gold to pledge for it.
Interest Rate and Repayment Tenure
Gold loan is a secured loan; therefore, its interest rate is low in comparison to unsecured loans such as personal loans. The gold rate in Varanasi varies from one lender to another and depends on various factors such as gold loan tenure, loan amount, etc. It also relies on where you are taking the gold loan – a bank or an NBFC. Banks usually charge lower gold loan interest rates than NBFCs. Therefore, if you are planning to apply for the gold loan, do not accept the first offer you get.
The prepayment period or gold rate in Varanasi varies from one lending institution to another. It usually ranges from 3 to 12 months.
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