Even with a low credit score, you can get out of a financial emergency with the help of Gold Loan EMI. It is a multipurpose loan. It can be used for traveling purposes, destination wedding, higher education of your child, etc. Further, it is more beneficial than a personal loan as it involves a low rate of interest and other features such as hassle-free and smooth process. It is a Secured Loan. So it can be quickly acquired by an ordinary person.
Many banks and financial institutions provide a Gold Loan. They provide Loans on different, but the minimum monthly interest rate offered is 1%. According to the terms and conditions, Gold Loan EMI is provided by the banks and financial institutions in two ways.
Schemes of Gold loan:
It involves two schemes designed according to the customer’s needs, convenience, time period, amount of Loan required, repayment of the loan, how much money you would use for your requirement, etc.
- A Gold Loan EMI with an overdraft facility
- A Gold loan EMI
A Gold Loan EMI with Overdraft Facility
A Gold loan EMI with an overdraft facility works similarly to a credit card. Banks deposit up to 75% value of the Gold to your savings account or may open a new account. You can spend as much as you want anytime-anywhere up to the allowed credit limit. The Gold Loan interest rate will be charged according to the amount you use. The interest rate could change after a year or before as per the bank’s rule. When you deposit your Gold as collateral security to your lender, then they open an overdraft account in which the loan amount will be credited according to the Gold value. Some banks allow you to withdraw the Loan amount using a debit card from an ATM and some link it to your savings bank account, open a new overdraft account, and some even open a new account with the benefits and features similar to a current account. Other ways to access the Loan amount involves using a cheque separately for the overdraft account. The interest rates are higher than the usual, and the payment is made in a lump sum, and the account can be closed anytime. A gold loan EMI with an overdraft facility is suited for smaller emergency expenses and general business capital requirements.
A Gold Loan with an EMI Option
A Gold Loan EMI option is a credit facility. In this, you just need to visit your nearest branch. Talk to the lender, submit the necessary documents, and pledge your Gold and get the loan amount according to the Gold value. Based on the regulations of the lending institution, you get a fixed loan amount for a fixed tenure with regular repayments in the form of EMI’s. It is best suited for making planned expenses. You can also plan your Loan repayments. All the banks and non-banking financial institutions provide these facilities. Banks usually offer at least 80 percent of the value of Gold as a Loan amount and NBFCs offer up to 60% of the value of Gold as a Loan. Most banks sanction a Gold Loan at the interest of minimum 10.70%
The decision is to be made on the basis of one’s own convenience, need, tenure, and advantages of each scheme. Overdraft facility involves benefits such as paying interest only on the amount used, which is not provided in case of an EMI scheme. Rates are higher in the case of overdraft facility as compared to the EMI option. An overdraft can be used in case of a sudden emergency.