Facing a medical emergency can be stressful, both emotionally and financially. The hospital bills keep on increasing while you are still recovering. Many families find themselves in a tight spot, not knowing how they will arrange emergency medical funding solutions at short notice.
While health insurance can cover some of the expenses, there is usually still a significant amount that you need to pay out-of-pocket. Availing a personal loan from a bank or Non-banking Financial Company (NBFC) can be a good option, but getting one quickly for medical emergencies can be challenging. It is in this context that gold loans for medical emergency can prove useful.
What is a Gold Loan for Medical Emergency?
Gold loans for medical emergency are secured loans where you pledge your gold jewellery as collateral to obtain financing from financial institutions. The lender will keep your gold ornaments in safe custody until you repay the loan amount in full.
Gold loans allow you to unlock the value of your idle gold assets quickly when you need funds. Once the loan is repaid, you can continue using the jewellery. The flexible repayment options make gold loans ideal for medical emergencies.
Benefits of Gold Loans for Medical Emergency
Here are some of the key advantages of choosing a gold loan for your immediate medical financing needs:
Quick Disbursal
When you or a loved one is admitted to the hospital, time is of the essence. The billing department will need you to clear payments before discharge or proceed with a treatment. Gold loans offer the fastest disbursal, often within just a few hours after submitting your application and gold ornaments for evaluation.
The minimum documentation and simplified eligibility criteria ensure you get the funds without delay.
High Loan Amount
Lending institutions often offer financing up to 75% of the market value of your gold. This means you can get a substantial loan amount even against a small amount of collateral. The high value of gold ensures you can raise adequate funds for medical treatments, including surgeries, chemotherapy, transplants, etc, which require large payments.
Low Interest Rates
Compared to personal loans and credit cards, interest rates on medical emergency loans are very reasonable. Rates typically start at around 9% p.a. and can go up to 24% p.a., depending on the loan provider. The secured nature of these loans makes them low risk for the lender, enabling lower interest cost.
Flexible Repayment
Gold loan providers offer flexible repayment tenures ranging from a few months to a couple of years or more. Repayment options for gold loans include a tenure that aligns with your income and repayment ability. Short-term loans of 3-6 months are ideal for medical contingencies that require one-time major expenses.
Retain Ownership of Gold
Your gold ornaments remain in your ownership throughout the loan tenure. The loan provider only keeps the jewellery until you repay. This means you can recover your gold anytime by paying the outstanding loan amount. There is no risk of losing the precious ornaments.
How to Apply for Gold Loan for Medical Emergency?
If you need to raise emergency funds for a medical situation, here is the process to apply for a gold loan:
- Choose a Reputable Lender: The first step is finding a reputable gold loan provider in your city, such as banks, NBFCs, etc. Opt for an established institution with good service quality and transparency.
- Collect Required Documents: Keep your Know Your Customer (KYC) documents (ID proof, address proof), income proof, and passport-size photographs ready, along with the invoices and billing details of the ownership of gold ornaments. These will fast-track verification.
- Fill out the Application Form: Specify your required loan amount, tenure, bank account details, etc., in the gold loan application form.
- Submit Gold Ornaments: Visit the lender's branch with your gold jewellery. In most cases, ornaments in 18-carat gold and above are accepted. Get your jewellery evaluated to know the loan amount you qualify for.
- Get Loan Approval: The loan provider will approve your loan quickly after checking your KYC documents and verifying the gold. Disbursal may take place in a few hours.
- Repay Loan: You can repay the loan through Equated Monthly Instalments (EMIs) or lump sum payments as per your chosen tenure and interest rate terms. Get your gold ornaments back once the loan is closed.
While taking out a gold loan, be transparent about how much money you need and the urgency of getting funds. This helps the lender approve your application faster.
Conclusion
A gold loan can prove to be a quick and convenient means of financing urgent medical treatment or hospitalisation. Choose a trusted gold loan provider, submit your gold ornaments as collateral and get access to substantial funds within hours. The minimal documentation, reasonable interest rates, and flexible tenure make gold loans ideal for a medical crisis. However, make sure you are able to repay the loan as per the agreed terms to avoid losing your precious gold assets.
