Benefits of Overdraft Against Gold Jewellery

 

The overdraft against gold facility, on the other hand, may be a suitable option because it functions similarly to credit cards. A credit card is a type of credit card that people use to make purchases. The amount you get through a gold overdraft loan is equivalent to your gold loan amount, and it works similarly to a credit card. When you deposit gold as collateral with your lender, they open an overdraft account and credit it with the loan amount equivalent to the gold's worth.

Another method is to retrieve the loan amount using cheques issued separately for the overdraft account. The interest rates on an overdraft are much higher than the average. Furthermore, unlike a loan on gold with an EMI option, an overdraft facility payment option is a one-time payment that can be cancelled at any time.

When you deposit your gold as collateral with your lender, they open an overdraft against gold account to which they credit the loan amount for the value of the gold pledged. Some banks allow you to withdraw the gold loan amount from any ATM using your debit card. Some even allow you to link it to your savings account or create a new overdraft account. Some lenders will even start a new account with similar perks and features to a present account.

A cheque that is issued separately for the overdraft account can also be used to access the loan amount. The interest rates on an overdraft facility are greater than normal. In addition, unlike a loan on gold with an EMI option, an overdraft facility has a one-time payment option that can be stopped at any moment.

The decision between a loan on gold with an EMI option and a gold loan with an overdraft facility is based on your preferences and financial needs. With an overdraft, you simply have to pay interest on the amount borrowed. In the case of a gold loan with an EMI option, however, the interest computation is different. For making planned expenses, a gold loan with an EMI option is the ideal option. You can also schedule your loan repayments as EMIs from your earnings in this way. A gold loan with overdraft facility, on the other hand, is best suited for smaller emergency costs and regular business capital requirements.

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