Many factors play pivotal roles in a loan to get approved. The lenders can provide the loan only if they are completely convinced that the borrower can repay the loan timely. And convincing the lenders can be a difficult task in some cases. Mostly, there are multiple levels of checking and verification conducted by the lending institutions, i.e. NBFCs and banks, before approving a loan. And it is important on the lenders’ part to go through all kinds of loans and payment history of the borrower.
Since the process is thorough, it might take a lot of time and effort for the borrower to get a loan finalized. However, there can be circumstances in one’s life where he/she might need the loan urgently. Events like educational fees, medical expenses, and other such things cannot be put on wait for long. So unsecured loans aren’t a convenient option in these cases. To get immediate financial assistance, gold loans are the best option.
Gold is secure collateral and gives the assurance of repayment. This makes it a top choice for the lenders as they hardly have to deal with the risks of loss. Also, the charges and prepayments for a gold loan to be approved are comparatively low, just like the rates of interest. The reason for this difference is the reduction in the level of risks for the lender.
A credit score is considered to be one of the essential factors to get the approval of the lenders. People with low credit scores generally do not get unsecured loans. And even if they get it, it comes at higher rates of interest. But gold loans are given much easily, regardless of the credit score. This is because the lender isn’t at the risk of losing the money if the borrower denies to reimburse the funds due to some reasons. The lender is entitled to the gold pledged by the borrower and he can sell it off to get the funds recovered. This makes it easier for the lenders to provide the loan, even if the person has a low credit score.
The weight and quality of gold are also important. 24-carat golds will fetch you better rates of the gold loan per gram, as compared to the 20-carat gold. In fact, gold less than 18-carat purity isn’t accepted by the lenders. So, the borrower must assess his gold articles before applying for the application.
HDFC gold loans are available at some of the lowest interest rates with minimal processing charges. All you need to do for getting a gold loan is to provide the KYC documents and gold that you can pledge as collateral. And you’ll have the funds in just about an hour.