Gold loan is becoming increasingly popular because of its numerous financial advantages like instant liquidity, lower interest rates, and easy repayment options.
However, one of the biggest advantages that many people fail to realise is Gold Loan Income Tax Exemption. In this article, we will discuss how gold loan is tax-friendly and its other financial benefits.
Firstly, the income tax exemption on gold loans is one of the main reasons why it is popular among borrowers. When you take a gold loan, the interest paid on the loan is treated as an expense, and therefore, you can claim income tax exemption on it under Section 80C of the Income Tax Act 1961. This means that the interest paid on the gold loan can be deducted from your taxable income, thereby reducing your tax liability.
Secondly, gold loan generally has lower interest rates than other types of loans like personal loans, credit card loans, or even unsecured business loans. As a result, gold loan borrowers can save a lot of money on interest payments.
Moreover, compared to other secured loans like home loans or car loans, the interest rates on gold loans are much lower and are more affordable. Gold loan interest rates start from 9.50% p.a. onwards, depending on the lender and the loan amount. This low-interest rate means that it is often a preferred option for many people.
Thirdly, gold loan borrowers also enjoy multiple repayment options. You can either opt for monthly, bi-monthly, quarterly, half-yearly, or annual interest repayment or repay the entire loan amount at once, whichever suits your financial situation. You also have the flexibility to choose the loan tenure as per your convenience.
Another advantage of taking a gold loan is that most lenders offer free insurance of gold. Under this scheme, the lender insures your gold against any loss or damage due to theft, natural calamities, or fire. This insurance cover ensures the safety of your gold and gives you peace of mind.
Finally, gold loans are also much more flexible as compared to other loans, as there are no foreclosure or part-prepayment fees. This means that in case you wish to pay off the loan earlier than the stipulated tenure, you can do so without incurring any additional charges.
One of the most significant factors that make gold loans an attractive option is their interest rates. Gold loan rates are generally much lower as compared to other types of loans such as a personal loan or a credit card loan. The interest rates on gold loans typically start from 9.50% p.a., which is lower than most other forms of credit.
The low interest rates make gold loans a cost-effective option for borrowers, allowing them to repay the loan comfortably over the tenure. Therefore, if you are looking for quick loan disbursal, loan starting from Rs. 5,000 up to Rs. 2 crore, and a hassle-free borrowing experience, consider gold loan as one of your options.