Privacy policy

Meeting short term goals with a gold loan.

Alright! So we all are familiar with the term goal setting. After extensive research, once we made a final decision, the next step comes up as planning and goal setting.

Planning is very crucial. Plan would involve factors like analysing the pros and cons, making efficient and optimum use of resources. Your financial goals, health goals, career goals sum up total as a life goal. All the goals are interconnected and interlinked. 

A proper division of the goals needs to be made. Investing for home renovation or an international holiday may be counted as a short term goal. Completing your sending home loan can be put in the category of a medium-term investment. On the other hand, long term loans can include child education, marriage plans or retirement funding.

We are managing these little practices, in turn, help in leading a more balanced life. Many times we get the lure or tempted and end up spending our funds in the now. Such behaviour of impulsive buying can take a back seat. We all follow the fixed paradigm, which is income -expenses = savings rather income minus savings = expenses. Bringing a shift is what it is needed. 

The unexpected need for finance can knock anyone’s door. From paying educational fees to emergency medical bills to the requirement of funds for a wedding or a holiday, you can require funds for every day to day operations of life—the first option is to take the aid of a credit card to meet all these financial needs—however, not all of us posse a credit card. Thus, the individuals are left to borrow the money from a bank or non-banking institutions. Also, when it comes to gold loans, compare different options offered by different banks and also check the gold interest rate with the scheme.

What is an ideal option to meet personal financial requirements?

A personal loan seems to be one of the most popular and viable options to acquire funds for personal needs. It is an unsecured loan which does not require you to submit any collateral in the form of cash, shares or any other asset. You can avail a personal loan with minimal documentation in a few hours. 

However, the problem with a personal loan is that one needs to submit the documents for income proof. Poor people who are facing unemployment and do not have stable job options thus find it hard to get a personal loan. Moreover, you also need to have a sound credit score of 750 or above to take a personal loan.

Taking a gold loan to meet short term financial requirements:

A gold loan can be thus considered an ideal choice for fulfilling short-term financial requirements due to the following reasons.

  1. A gold loan provided by banks and non-banking financial institutions is a secured loan that can be availed against the mortgage of gold. Financial institutions do not accept studded jewellery to give a gold loan.
  1. To get a gold loan, you don’t require to submit any documents for income proof, and thus you can avail a gold loan with minimal documents for identity and address proof. Also, banks do not check any credit score before availing a gold loan.
  1. Another highlight of a gold loan is that you can avail a gold loan for short term tenure starting from 1 day to 36 months. Thus, if you want to pay medical bills or education fees, you can avail a gold loan for one day, repay the loan and take back your gold.

Borrowers can get a gold loan up to 75% of the value of the gold asset depending on gold loan rates and the purity of the gold. Different financial institutions use a different method for evaluation for gold. Some may consider the weekly gold rates for evaluating the value of gold; others may find daily gold loan rates.Another option you can consider is cash against gold. Cash forgold is a great option as it is an instant process. Gold Loan lends 75% at LTV whereas You can also avail Cash for Gold which would be 99% around the actual value.

  1. With online gold loan markets, it has become convenient to avail a gold loan. A lot of financial institutions provide the convenience of digital procedures for getting funds for gold.
  1. Also, it is easy to repay the gold loan as well. Borrowers can choose to pay the interest every month, and the principal amount of the loan can be paid before or at the end of the maturity period.
  1. A lot of financial institutions even provide the overdraft facility against gold. You can avail gold loan as much and whenever you need. Also, you have to pay interest only on the amount used.
  2.  Due to the current pandemic, uncertainty and panic have caught the way of everyone. But, n need to worry. The banks and even the borrowers are a spectacle, and the loan procedure has been delayed. But the gold jewels can act as a form of saviour in such a case… , No need for a lengthy procedure. It is a simple process in which you can get a loan against your gold jewels. Gold Loan is the only loan which gives you feasibility to get the loan even with a low credit score. Also, there is no need to have a strong credit history. Being a collateral-based loan, it is secure. Many people confuse between pledging and selling. Taking a gold loan does not imply selling it slightly after the full payment is made, your gold will be returned to you. 

Also, the gold jewels are safe in the lockers of the banks. There is 24×7 security surveillance. 

The value of gold is calculated based on its actual real value and the basis of the market rates.

In comparison to other forms of Gold Loans, gold loan is considered to be the best as it is easy, fast and convenient to use. Some of its points are as follows :

  • No need to rush to the bank. An easily approachable manner in the form of free and paperless way is possible
  • Easy, simple documentation and a transparent process to follow
  • Gold Loan is affordable and comes with an option of the low-interest rate. 
  • Flexible payment options like EMI or pay in instalments is possible.

Also, the entire study of the market needs to be done. Investing before, after or on a specified date, month, or a period can make a much difference. A proper strategy or plan needs to be formulated. Whether the market is showing an upward trend or a downward trend, the prices are low now; they may be high in the future. 

Also, we need to keep in mind the trend of inflation. In some regards, an opinion about a financial planner is what calls forth the best advice.

The entire process of goal-setting can seem to be tricky. Procrastination is a significant hit faced by us all. We end up feeling guilty and blame ourselves. But what lies beneath it is different. Not every day is the same, priority change, something can come up, and change in the plan needs to be made. However, a balance needs to achieve. Savings is equal to compounding. That is why save, and sav more is a common acronym followed. Sacrifice the present for a better tomorrow. A person might over save or might under also save at the same time. But, the goal is to reach and create an optimal level of utilization. Also, the current present has taught us the lesson about facing the uncertain. 

While formulating the entire action plan for goal planning. It is essential to introspect, reflect and analyse all the things. In most of the cases, we end up making the wrong choices. We set unrealistic goals. We try to find a quick fix solution for our financial problem. For example, a decision taken in haste can lead to regret later. Selling your gold is not good. Taking time for things and then taking action is considered to be a wise step. Also, the returns are there. It depends on a plethora of factors to get the returns. We hold unexpected exploration about the returns on investments. There is a separate asset class for each investment set that can vary.

Another close declaration needs to be made. There is a thin line of difference between investment planning and financial planning. Both of them goes hand in hand. Yet they both are different. Choosing which funds to invest and when to invest is a known fact and requires in-depth analysis. This can be best done with the help of a financial adviser. Financial planning is more about saving enough and ensuring a smooth and balanced economic life so that you never have to face a problem or come into a debt. 

Investment planning will be an addition in financial planning to make a complete, robust plan. 

Conclusion: Thus, a gold loan can be easily availed at an interest rate lower than a personal loan without any requirement of income proofs or credit score. One can also flexibly repay the gold loan as and when one wants. However, before availing a gold loan for short-term personal needs, the borrower must check the credibility of financial lenders to avoid any defaults.

Thereby, planning is the need of the hour in every life stage. Keeping all the factors in mind, it is requested of all to start the practice of goal -setting without making any delay.