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gold loan

The reason behind the massive growth in the gold loan industry is that every Indian household has some sort of investment in the form of gold ornaments. These gold ornaments are of great help in times of financial help needed by people. Gold loans have turned out to be a great substitute for personal loans when they are used for business purposes. Business personalities today prefer gold loans over other unsecured loans to be used to increase their business capacity and growth. Multiple features make gold loans more attractive to people. 

Here are some benefits due to which people apply for gold loans for their business use:

  • Fast approval and disbursal of the loan amount: when a business owner is made come face to face with financial emergencies he doesn’t have time to go for a long loan procedure. In such a situation he needs financial help with nominal documentation and for that purpose, a gold loan suits his requirement the best. Anyone who needs gold can apply for the same online and get the application serviced there. After receiving the application, the bank sends a loan manager to your home to evaluate the purity of the gold articles the borrower wishes to pledge as security against the loan. All the banks provide a gold loan per gram basis. Once the gold is verified, and the borrower submits his KYC documents, the applicants receive approval for the loan within thirty minutes of the approval. There’s no other secured loan that gets processed so fast.
  • Availability checking online: Unlike other loans, gold loans provide a facility to check their eligibility criteria online. This helps the borrower to check if they will be eligible for the loan or not without having to visit the bank branch in person. This saves his time and energy and if he is not eligible for it then he can focus his time and energy on some other loan avenue. To be eligible for a ICICI Gold Loan, the purity of a gold loan should range between 18 karats to 22 karats. The best feature is that he can perform these calculations sitting at home. This means the borrower can calculate the worth of his loan before pledging it for his business. These types of pre-approved loans help a business owner plan his expenses accordingly even before availing of the loan amount.
  • Simple and minimal documentation: when a person applies for a traditional business loan then he has to go for detailed documentation which involves time-consuming formalities to be fulfilled. For this, the loan applicant has to arrange all the mentioned documents which are again time taking. Even if one tries on his end to do it faster, the lender then requires to verify each of those documents. On the other hand, there are gold loans which require nominal documentation and hence get processed faster.
  • No CIBIL score required: The gold loan is specifically beneficial for those applicants who have a poor credit/CIBIL score as in gold loan the lender does not check for the creditworthiness of the borrower. This is done because the lender provided gold articles by the borrower which reduces his risk at the maximum. Even if the borrower defaults, the lender can recover his loan amount by selling off the gold articles of the borrower.
  • Safety of gold: More than anywhere in the world, gold is a precious possession in India. Every individual hesitates while lending their loan to any bank or financial institution as they have a fear of their gold articles being replaced with fake ones. Therefore, people are highly concerned about the safety of their gold ornaments.
  • High loan to value: a gold loan is a loan in which a borrower can get a high loan to value against the value of the security. The borrower can get up to 90% of the value of gold in the present market as the loan amount. The reason for this is that gold has always been a high in-demand commodity. Therefore, the lenders do not hesitate in giving high LTVs.


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