Over the past decade; the value of gold has been on a steady rise. Many people are now taking it as an alternative to help them to acquire loans. A large number of people particularly from eastern cultures been seen to purchase it in Melbourne, Australia during the festive seasons. These people who also own gold traditionally from weddings have realized they can use this gold that is shut up in lockers as collateral as to acquire a loan from gold dealers.
An individual who has gold and it looking to start a business or pay for education should consider applying for a loan against gold instead of considering going for personal loans through a bank. With this kind of loan, the borrower pledges the gold to the gold dealer gold as a form of security. This valuable will be returned to the owner once the loan is repaid in full.
Taking a gold loan doesn’t require much formality. Unlike a personal loan, which requires payslips, and a well-established credit history, a gold loan doesn’t require you to hand over any documents, just your ID and the gold as collateral. The loan is also secured against your gold asset and not against you personally. This means in the unfortunate event of a default, your credit score is not affected.
Some features that make this type of loan stand out are:
It is a secured loan as the gold is in the hands of a gold dealer as collateral. The repayment term of a can be as short as 30 days and can extend to as long as required.
The reasons why one must opt for a loan against gold are:
The processing time is fast as the application only required the borrowers ID and of course the gold jewellery. The gold dealer will test the gold and tell you how much they can lend against it. As you are only required to pay the interest charged each month. The principal amount can be paid once you decide to close the loan off.
A loan against gold in australia allows an individual to raise money to put to good use:
When applying for a loan against gold in Australia, the gold dealer will only provide the borrower with 80 percent of the value gold jewellery items you put up as collateral. The dealer requires security to ensure that the borrower will repay the amount on time and avoid any defaults. It’s worthwhile asking the gold dealer how long will he allow you to pay in case you are late with a payment. Some dealers will put you in default and sell your items in a few days other dealers will give you up to two weeks.
Gold is an extremely liquid commodity. An individual can make the most of it by using it to apply for a loan to meet any immediate financial requirements. Also, since Australians love their gold jewellery so chances of a borrower defaulting on such an amount is extremely slim.