What is a gold loan, and how does it work?

In Sri Lanka and across the world, gold is revered not only for its monetary value but also for its sentimentality. Many people inherit gold jewellery and buy or are gifted gold coins as future investments. But did you know that this precious metal is an excellent asset that you can use to generate cash flow during a financial emergency? Read more about gold loans and everything you need to know about them.

What are gold loans?

Gold loans, also known as a ‘loans against gold’, are loans that borrowers can take from lenders after pawning their gold items in lieu of other assets. The loan is provided once the gold is inspected and valued, and the loan amount provided is a certain percentage of the gold’s value. Gold loans are very common in Sri Lanka as it is one of the fastest and most convenient ways for obtaining short-term financial aid.

How does a gold loan work?

Obtaining a gold loan follows a different procedure in comparison to other forms of loans. It doesn’t require documentation such as income proof or guarantors and is in fact similar to the process of pawning where you simply hand over your gold items and walk away with a loan.

Equipped with state-of-the-art machinery, the highly experienced staff at HNB Finance is geared to offer the highest quality of service to our customers with the least amount of hassle. All you need is to bring in your gold articles (generally between 18-24 karats) along with any proof of valuation. According to the inspection, we will provide a sanctioned loan amount, and you will obtain cash for the gold.

As per the loan agreement, you will then be required to pay off the loan amount with interest, after which you will be able to get the pledged gold items back. At HNB Finance, special protocols have been placed for all gold transactions and inspections, which are given the utmost security to ensure this precious metal does not incur any damage.

Who is eligible for a gold loan?

What makes our gold loan service one of the best financial services is that it is just as accessible as it is fast and convenient. This service is available across our island-wide branches for Sri Lankan citizens over the age of 16 years. All you will need to bring is your gold items (jewellery, coins, or biscuits) along with your ID card.

How long is a gold loan tenure?

Compared to other loans, the tenure for gold loans is much shorter. However, with that said, the repayment method is quite flexible. At HNB Finance, customers can choose a repayment scheme that best suits them. This can range from ten days, three months, six months or even a year! Also, our customers will be able to pay instalments and interest at any branch which provides our gold loan service. Customers are also provided the option of making payments via eZ cash and mCash. Continually, you will also be able to redeem one gold article when you have obtained a gold loan for more than one article.

Benefits of taking a HNB Finance gold loan

There are several benefits that can come from taking out a gold loan. Some benefits include:

    • Lowest interest rates – Gold loan interest rates present the lowest rates in the market, since the gold items act as
      collateral. These attractive interest rates also translate to relatively lower repayment instalments.
    • Free insurance cover for gold items – At HNB Finance we ensure the maximum safety of your gold items when you take out a
      gold loan with us.
    • No documentation fees, service or other hidden charges – Gold loans at HNB Finance makes the process as effortless as
      possible through hassle-free and quick processing.
    • Effortless processing – You are neither required to submit any other form of collateral nor do you require a guarantor, as
      your gold items will secure your loan.
    • Effortless processing – You are neither required to submit any other form of collateral nor do you require a guarantor, as
      your gold items will secure your loan.
    • Assurance of confidentiality – Any information obtained is kept safe and private at all times.
    • The flexibility of use – Unlike other loan facilities, with a gold loan, you can use the money however you please. These
      loans can be used to fund any type of expense.
    • Liquidate idle assets – Finally, gold is most often an idle asset that is not often used, and because of this, it is the
      perfect solution for you to raise capital if you are in a tough financial situation.
    • Recover assets immediately – You are able to recover your gold articles without any prior notice.
    • Redeem facility – HNB Finance offers you the ability to redeem your unclaimed gold jewellery and articles pawned at other
      financial institutes before they are auctioned off.
    • Quick and safe service – Assured services within 3 minutes duration conducted in adherence with Covid-19 preventive measures
      to ensure customer safety.

Even though many people are quite wary of pawning their gold items to financial institutions, there are certainly several undeniable benefits that can come with it. Gold loans are an excellent way to get money in a fast and convenient manner while also being assured your gold items are being well protected. Enjoy a hassle-free process with no hidden charges and start your future plans today as you take out agold loan with HNB Finance.