Indians love gold. Gold is purchased on auspicious occasions like festivals, weddings and even birthdays. Every Indian woman has a nominal amount of gold at her disposal. Loan against gold is a very long tradition in Indian lending market. But many people still do not opt to take a gold loan out of fear. They have many misconceptions regarding the concept and workings of gold loan. If you are also having second thoughts regarding getting a gold loan, then read below to clear your myths about gold loan!
MYTH 1: Only Jewelers offer gold loan
Now-a-days many leading banks and NBFCs offer easy gold loans with exciting interest rates. As more and more people started investing in gold, many banks and NBFCs started offering gold loans. There are some NBFCs who offer only gold loan. Getting a gold loan from a legitimate bank or NBFC is always secure and assuring in every aspect. Thus those who think that only jewelers offer gold loan and are unsure about legitimacy can apply for a gold loan at a bank or NBFC.
MYTH 2: Your gold may get secretly exchanged
Unlike any other secured loans, in gold loan you have to keep your gold with bank or NBFC in order to get a loan against it. When you pay back your loan in the given tenure, the bank or NBFC returns your gold ornaments. Many people think that the money lender replaces your ornaments with similar fake ornaments. Thus concerning the safety of their beloved jewelry, they opt to avoid the option of gold loan. But this is not true. Banks and NBFCs have special security and locker systems to protect your gold that is being kept as collateral. It will be removed only after you have paid off the loan in full. So you can relax and trustfully give your gold to the bank or NBFC to get a loan against it.
MYTH 3: Gold loan has very high interest rates
Banks and NBFCs offer various interest rates as per the type of loan. If the loan is unsecured type of loan then the interest rates are high but if the loan is a secured type of loan then the interest rates are comparatively low. Gold loan is a secured type of loan. Thus banks and NBFCs do not charge very high interest rates. The interest rate for gold loan ranges from 10.26%* to 26%*. The interest rate changes as per the profile of the loan borrower.
MYTH 4: You can’t get gold loan for old traditional jewellery
Many think that banks and NBFCs offer gold loan only on new and latest gold ornament. Thus though they have ample amount of old gold ornament at their disposal they d not apply for a gold loan. But let us clear this myth for you, banks do offer loan on old gold ornaments also. The gold has to be pure and minimum 18 karat to get a loan. If your gold ornaments fit in these specific criteria, then you can easily get a gold loan.
MYTH 5: The procedure to get a Gold loan is time consuming
This is the biggest hoax of all when it comes to myths about gold loan. Gold loan is the only loan which you can get on spot. Banks and NBFCs approve gold loan and disburse loan amount within a day, in some cases within an hour. So if you are in need of immediate funds, you should definitely get a gold loan.
Now that you are clear about all the myths circling gold loan, apply for gold loan.
