What are the advantages of opting for a gold loan top-up over other financial products?

Gold loan top-up facility allows existing gold loan borrowers to avail of additional funds against their pledged gold ornaments without having to mortgage any additional gold. Opting for a top-up on an existing gold loan has several benefits compared to taking a fresh personal loan, credit card cash advance, or any other credit product. Given below are a few such perks:

1. Quick and Streamlined Process: Gold loan top-ups involve minimal paperwork and formalities for existing customers. The additional amount gets credited quickly into the linked bank account.
2. Higher Maximum Loan Amount: Gold loans offer a higher maximum loan amount eligibility compared to most other products. Top-up is possible up to 75% Loan-to-Value (LTV) ratio depending on underlying gold value.
3. Lower Rate of Interest: Interest rates on gold loan top-ups are generally lower than on personal loans. Only marginal interest needs to be serviced annually on the top-up principal.
4. Flexibility in Repayment Options: Some loan providers allow tenure extension on total loans to keep Equated Monthly Instalments (EMIs) manageable. There are often provisions to pay only interest on top-up principal for the initial few months. Some lenders may also allow foreclosure on the top-up anytime with little to no penalty charges.
5. Retains Ownership of Gold Ornaments: The ownership of pledged jewellery remains with the borrower. Gold ornaments can be retrieved on repayment of the full loan amount.

Therefore, existing gold loan borrowers can conveniently fulfil urgent or large funding needs through a top-up while retaining ownership of their gold assets.