Top 10 Benefits of Taking a Gold Loan During Festival Seasons

Gold Loans provide fast, hassle-free access to funds without the need to sell your jewellery. With lower interest rates, minimal paperwork, and flexible repayment options, they’re ideal for managing festive expenses and making celebrations more affordable. Read on to know the top 10 benefits of a Gold Loan during festivals.

10 Benefits of Taking a Gold Loan During Festive Seasons

Here are the top 10 benefits of getting a Gold Loan during festivals:

1. Special Festival Offers and Discounts

Festival season is when you can take advantage of special schemes and discounts for customers. These perks offered by NBFCs and banks can include:

• No processing fee around Diwali and Dussehra
• A 0.5 to 1% concession in the interest rate
• Cashback on timely payments
• Free valuation of gold
• Extended loan tenure without any additional charges

Also Read: Why Taking a Gold Loan is Smarter Than Breaking Your Fixed Deposit in an Emergency?

2. Lower Interest Rates Compared to Unsecured Loans

Since these loans are secured against your gold, a lower interest rate is charged as compared to unsecured loans. This translates into much cheaper borrowing costs for you. Here’s a quick comparison of interest rate estimates:

• Gold Loan (banks): 8.5% - 14% p.a.
• Gold Loan (NBFCs): 10% - 24% p.a.
• Personal Loan: 10% - 24%+ p.a.
• Credit Card: 36%+ APR

3. No CIBIL Score or Income Proof Requirements

Unlike other loans, gold loans don’t heavily depend on your credit history or income documentation. Your gold serves as the primary security, eliminating the need for salary slips or high credit scores. This makes the loans accessible to:

• Self-employed individuals
• Homemakers
• Farmers
• Small business owners
• People with irregular income

4. Safe and Insured Storage Facilities for Your Gold

The pledged jewellery remains in the lender’s safe custody, while you retain ownership of it. You can typically expect bank-grade vaults with 24/7 CCTV monitoring, ensuring safekeeping. Additionally, you can buy insurance to cover against theft of your gold or any damage. This helps you remain stress-free during the festivities. Once the loan is paid off, your gold is immediately returned to you.

Also Read: How to Apply for a Gold Loan

5. Flexible Loan Amount Based on the Gold Value

The nature of gold loans means that with the right timing, you could get easy approvals for a higher amount. The process involves choosing from flexible loan amounts determined by the current market value of your gold, which are limited by the RBI’s loan-to-value ratio. The higher the current market value, the higher the amount you can get approved for.

The current loan-to-value ratio is up to 85% for loans up to INR 2.5 lakh and 75% for larger loans. This means it’s easier to get a loan up to this specific percentage of your gold’s market value. Gold rates have been at record highs lately, further increasing the likelihood of higher loan amounts.

6. Multiple and Flexible Repayment Options

A Gold Loan offers several repayment methods, keeping in mind borrowers’ financial situation just after the festival ends:

• Regular EMIs: Fixed monthly instalments
• Interest-only: Pay interest every month with principal paid at the end of the tenure
• Bullet Repayment: Pay the full principal and interest at maturity
• Partial repayment: Pay any amount towards principal at any time

This flexibility helps alleviate the financial strain that often accompanies festive spending.

Also Read: Why Choose Poonawalla Fincorp for Your Gold Loan Needs?

7. Perfect for Seasonal Business Requirements

If you’re a small-scale business owner or a trader, you’d benefit from the time-bound finance of a Gold Loan. Business opportunities soar during festival times, and that’s where gold loans can help you. The funds have no end-use restrictions, enabling you to spend them on things like:

• Stock purchase for festival demand
• Renovation of shops before the peak season
• Hiring temporary staff for the festival
• Topical or seasonal marketing campaigns
• Working capital for bulk orders

8. Quick Processing and Instant Liquidity

Compared to other types of loans, a Gold Loan has a faster processing time, offering instant liquidity. Once your gold has been assessed, processing could take between 30 minutes and 3 hours. The minimal documentation helps expedite the process, as does the minimal verification. This swift processing will help you grab those festival deals in time!

Also Read: Gold Loan for Wedding Expenses? Benefits, Risks & Smart Tips

9. No End-use Restrictions on Funds

Using gold loans means having the utmost freedom regarding the utilisation of funds. You won’t have to provide any proof of use or sign any declarations, opening the usage up to a world of possibilities. Some popular festival uses include:

• Festival shopping and gifting
• Travel and holiday expenses
• Wedding expenditures
• Home renovation and decoration
• Religious ceremonies and donations
• Clearing of year-end financial obligations

10. Doorstep Services During Rush Time for Festivals

Many NBFCs now provide convenience services during festivals or on special occasions, bringing financial relief right to your doorstep:

• Home pick-up of gold for valuation
• Online application processes
• Digital documentation upload
• Video KYC verification
• Direct bank transfers of the loan amount

These services save time during busy festival preparations.

Also Read: 8 Important things to consider before applying for an instant gold loan

To Conclude

By opting for a Gold Loan during the festive season, you’re choosing one of the most practical financing options. You not only get quick access to funds but also get them at a lower interest rate, which keeps borrowing costs manageable.

If you are exploring a Gold Loan this festive season, consider Poonawalla Fincorp, which offers simple processes and customer-friendly terms.

FAQs

What are the benefits of taking a Gold Loan during the festival season?

Gold loans offer fast funds, lower interest rates compared to unsecured loans, and flexible repayment terms. Many lenders also offer special festival discounts and waived processing fees.

Is it safe to pledge gold for a loan during the festival seasons?

Yes, RBI-registered NBFCs keep your gold in insured, high-security vaults. They return it upon loan repayment, making it a safe option.

Can I use the Gold Loan amount for any purpose during festivals?

Absolutely, there are no spending restrictions on the funds from your Gold Loan. You can use the funds for gifts, travel, home renovation, or any festival-related expense.

How quickly can I get a Gold Loan approved during festivals?

Many NBFCs approve and disburse gold loans within hours. Some offer instant loans in 30 minutes or less, provided the documentation is complete.

Do gold loans affect my credit score?

Yes, gold loans do indirectly impact your credit score; more specifically, this is dictated by your repayment behaviour. While availing of the loan itself won’t affect your score, it will show up on your credit report. If you fail to repay the loan on time, your credit score will drop, while making regular payments can positively affect it.

Are there any special festive offers on gold loans from NBFCs in India?

Yes, many NBFCs introduce lower processing fees and discounted interest rates during major festivals. Always check current offers before applying.