Indians love gold, be it jewellery, coins, body piercings, or even a gold tooth!
From shoes made of gold to sarees with gold embroidery, Indians are famous for wearing their gold literally on the sleeve.
People have shown their love for the yellow metal not only by flaunting it as a wearable fashion piece but also by eating 24 karat gold in their ice creams.
Such affinity to gold is not new to us, and gold has been traditionally a part of all auspicious occasions across different cultures in the country.
And now, people are using their gold possessions in financial need. Loans against gold or gold loans are gaining popularity by the day.
However, several myths put people in a dilemma about taking a gold loan. Let’s clear the doubts regarding gold loans today.
What is Gold Loan?
A gold loan is a type of secured loan where the borrower pledges his gold possessions like gold necklaces, bracelets, rings, coins, etc., as collateral to get a loan amount. The Loan amount can be used for purposes like renovation of the house, travelling, college fees, destination weddings, and complicated surgery.
Myths vs Facts About Taking a Gold Loan
Taking a gold loan is expensive
The first myth people have about gold loans is that they are expensive. People believe that gold loans come at a very high-interest rate and processing charges.
The fact is, gold loans are secured loans where the borrower pledges his gold as collateral. It assures the lender of getting back the money he lends. Thus, gold loans are available at low-interest rates. Muthoot FinCorp Gold Loan offered by Muthoot FinCorp is available at an interest rate starting at only 11.99%. Moreover, they charge a nominal processing fee of only Rs. 20 including GST on selected gold loan schemes.
The pledged gold may get stolen
Borrowers are often scared that the gold they keep with the lender as collateral may get stolen, lost, or replaced with fake gold. Since gold is very expensive, it gives people sleepless nights to keep their precious metal in someone else’s custody.
Borrowers need not sweat over the safety of their gold items if they pledge their gold with reputed and trusted lenders like Muthoot FinCorp. Muthoot FinCorp keeps the pledged gold in secure vaults under constant surveillance. Once the borrower repays the loan and interest charges, he can get his gold back without any delay.
The documentation and processing are time-consuming and complicated
Another myth about gold loans is that gold loans require lengthy documentation from the borrower, and the processing time for a gold loan is long. People think that gold loan processing is complicated, and lenders reject a lot of gold loan applications.
The fact is that gold loans require minimum documentation from the borrower. Customers need to submit only their ID proof and Address proof to get a Muthoot FinCorp Gold Loan. Lenders quickly disburse gold loans because they are secured loans, and the disbursal process is very simple.
Only jewellery shops offer a gold loan
A common myth about gold loans is that only jewellery shops offer gold loans. It restricts people from looking for different options and getting better offers.
Various lending platforms like Muthoot Capital offer gold loans at remarkably low-interest rates under different customer-friendly schemes. Customers can even apply only for a gold loan with Muthoot FinCorp.
Traditional jewellery is not accepted
Gold is transferred as an asset from one generation to another in every Indian family. People are often apprehensive that their old and out-of-fashion gold will not be eligible for a gold loan.
The age of the gold jewellery does not matter while taking a gold loan. Only the purity of the gold matters, and the pledged gold should be a minimum of 18 karat gold.
Gold loans require a great credit score
Like other loans, people think a gold loan also requires a great credit score and a wonderful credit history.
This is not true as people with an average credit score can also get a gold loan for a reasonable interest rate by pledging their gold as a security.
Muthoot FinCorp Gold Loan makes gold loans accessible to customers at a low-interest rate and quick processing time. A gold loan can give a person the much-needed funds without running from pillar to post for money.