Gold has a profound impact on the value of world currencies, especially it has a significant impact on the US economy. The value of the gold is invariably dependent on its relative safety when compared to other forms of assets. The monetary role of the precious yellow metal through the current era includes Swiss banking, the Bank for International Settlements and the development of the Euro.
It can work as a security for obtaining the required amount of finance from any public banks or non-banking corporations. In fact, this is one of the most alluring loans for the customers because you can get 75-85% of loan when you use gold as collateral.
Reasons To Borrow Gold Loans
Gold due to its stability is regarded as the best investment technique. There is only a finite amount of gold resources on Earth and this metal and its bullion have greater value wherever you go. When you are cash crunched, you can borrow finance against your gold bullion without the need to sell it. In fact, gold coins and bullions are considered as long term investments.
As compared to other types of loans, gold loan is gaining a lot of popularity in the recent ages due to the number of advantages it offers over other types of loans.
Let us see some of the reasons here why gold loans have greater importance
Gold Loans Are Cheaper Than Other Loans (Personal & Credit Card Loans)
Gold loans are the cheapest and fastest loan in comparison with other loans. It usually provides a higher maximum cap than a Personal loan. Similarly, it is accompanied by a lower interest rate which implies they are cheaper than other loans. So, you will spend less money out of your pocket to repay the loan.
Faster Processing Time
Gold loans are secured loans. They include moderate eligibility criteria with straightforward documents. The process of applying the gold loan is very simple and fast provided you have all the necessary documents in place. In a nutshell, it is a quick and hassle-free loan requiring minimal documentation.
There Are No Charges On Foreclosure Or Part Pre-Payment
The tenure for gold loans is typically a one-year duration. No prepayment penalty can be levied on foreclose for the gold loans. However, for other types of loans such as mortgage loans or student loans, the banks are charging pre-payment penalties up to 2 percent on the outstanding amount.
Your Gold Will Be Completely Safe Without Charges
We are living in an era where security has become a question. Keeping valuables like gold and precious stones at home is certainly risky so most people prefer not to stock the items at home and deposit in a security vault. However, you need to pay monthly or yearly charges to the bank if you use the bank locker. Apparently, when you take a gold loan when you are cash crunched, your asset will be secure instead of lying idle in the locker without any extra charges.
So What Are The Reason You Should Take A Gold Loan
In addition to the above-mentioned reasons like the low-interest rate, fast processing time, there are few distinct reasons why it is a good idea to borrow against gold.
- Gold is a liquid asset, so it can be easily bought or sold. Every business requires cash, so when you are in need of cash, you can easily convert your bullions or coins against cash very easily.
- Since the demand for this precious metal is usually high, you can capitalize on the asset multiple times rather than selling at once for a profit.
- Currently, most of our assets are intangible forms like bonds, stocks, and shares. Apparently, when there is market fluctuation (inflates or deflates) gold is regarded as a secure asset when compared to other commodities. So you can sell it anywhere you go and at any time.
To Sum It Up
Many customers in the United States take up a loan using bullion as collateral just within 24hrs. If you are in crisis and looking for instant cash, gold loans are far better options than any other loan type.