How beneficial is a Gold Loan on a CIBIL score and Credit Report?
The best way to create a good credit history is to choose a gold loan rather than availing for a personal or any other type of loan. Why! Let us understand.
In today’s world, thanks to the advent of technology, information can now be accessed with just a few swipes of a screen or a tap of buttons. Hence, people are now, more than before, are aware of how a credit information bureau functions and the related jargons associated with it.The Credit Information Bureau of India Limited (CIBIL) was one of the first credit companies in India which were established in the year 2000. Only after the age of the internet did people come to know about its full form and the work it does. Now, people make sure to keep a constant track of it with a steady stream of updates of their CIBIL report and try to find out the quickest way to resolve it in case a negative entry shows up.Of more than the eighty percent of personal loans that are sanctioned, it is approved for those people who have a credit score between 750 and 900, therefore proving the point that credit or loan approval is directly dependant on your credit score.
How are gold loans and CIBIL connected?
The answer is simple. India, as a country, accounts for nearly thirty percent of the international demand for gold. The reason behind this data is simple; most of the Indian urban households see the precious metal as a safe means of investment, security as well as insurance.
An added benefit of a gold loan is the quick availability of it; due to the rate of exchange of the precious metal. What more, the reason why it is easy to avail for a gold loan is that it is a secured loan which you can get approved for within the same day.
According to the TransUnion Credit Bureau of India Limited, the rising popularity of a gold loan is due to the fact that all jewelry loans have a definite positive impact on your credit score.
Because a gold loan is a secured loan, the gold ornaments are pledged in for cash. If you are capable of keeping track, a secured loan has the capability of making a positive impact on your credit score.
Why a gold loan?
One of the main reasons is that it has a lesser rate of interest and it’s less expensive than other secured loans. Added subsidiary perks from the government is another benefit to the availing of a gold loan.
The Bottom Line
When you opt for a gold loan, make sure that you pay it off like any other secured loan; paying off the EMIs is extremely important for your CIBIL report as well as pay attention to the rules and regulations. This in the long term will boost up your credit score to get you the financing you require.