How to get Gold Loan at lowest interest rate
Hidden facts about Gold Loan, Gold Loan a tool to improve your financial health, Tricks to get gold loan at best rate
Gold Loan: Urgent need of funds can be catered in various ways, one of which is availing Gold Loan. This is the easiest loan available in the industry. Where you have to pledge gold (including jewelry, ornaments and bank-issued coins) as collateral for taking a loan. The bank/lender uses the gold as security against potential payment default by the customer. The amount sanctioned is a certain percentage of the value of the gold that has been pledged, this may be up to 90% of the value of the pledged gold.
Generally gold loans are short term loans except in a few cases when gold is given as collateral to long term loans like housing loan, education loans and others. The repayment period can range from one month to a few years. In India interest rates are ranging between 7% p.a. and 29% p.a. You can avail a gold loan amount of up to Rs.1.5 crore in India.
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Why to avail a Gold Loan!
You can avail this in order to finance various needs, such as for educational purposes, medical emergencies, going on a holiday, and so on. Interest rates on these loans are lower than on personal loans since this is a relatively low-risk loan for lenders as they hold your gold as collateral. There are a number of benefits of this loan. See the benefits below –
Benefits of Gold loan:
1. Lower interest rate on gold loans
2. Faster process with minimal documentation
3. No income proof required
4. Liquidate your illiquid asset
5. Borrower is free to put it to any use
6. Repay this loan anytime
7. Security of your gold is assured
8. Gold loan can improve your credit score
9. Nil or very low prepayment and processing fees
10. No Credit Score requirement.
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Presently, almost all the lenders provide loans on credit score based eligibility. Gold loan is one of the loans which is given without accessing your credit score. when you repay EMIs regularly, it can improve your credit score very easily. Not only this, you can use your illiquid asset to get funds in need. Some lenders offer the option of discount on the prevailing interest rate on the loan against gold if the borrower repays the interest regularly. This rebate can be 1% – 2% off on the original rate of interest.
Documents required to avail a Gold Loan-
Very Minimal documents are required such as Recent Photographs, application form (Provided by lenders), Identity Documentation/PAN Card/Aadhaar Card, Proof of Address to avail this facility.
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How to avail a Gold Loan? From Where to avail a Gold loan?
It is important to compare gold loans and compare different providers before taking this facility. Make sure you get the best terms and rates before you take a loan. You should follow below steps while availing this loan.
1. Compare interest rates among various lenders.
2. Find the best repayment options
3. Select a lender who offers the highest loan amount for your asset value
4. Evaluate the credibility of the lender. (Do not just handover your gold to any lender, Find a well known and reliable lender like government banks and jewelers with a good reputation.)
5. Enquire the safety measures undertaken by the lender for the gold you pledge
6. Ask for the loan disbursal time.
7. Choose a lender who respects customer interests and has a good customer support system
8. Charges levied by the lender like processing fee, documentation fee, appraiser fee, payment default fee, loan overdue fee, etc.
9. Choose repayment structure which suits you best
You can apply for this loan through online or offline channels.
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How can you repay!
There are various options offered by lenders to borrowers for the repayment of a gold loan.
1. Repayment in Equated Monthly Installments (EMI)
2. Payment of interest upfront and repayment of the principal loan amount at the end of the loan tenure.
3. Payment of interest on a monthly basis and repayment of the principal loan amount at the end of the loan tenure.
4. You can make prepayments at any time during loan period
5. You can also do part payments to reduce the loan period and interest.
To conclude, A gold loan is a method of availing finance against your ornaments or jewelry such as bangles, necklaces, bracelets, earrings, pendants, watches, coins, etc., can be availed by any Indian citizen from banks or non-banking financial institutions (NBFCs). In addition to this, It is easy to avail, easy to manage and easy to repay. This is how this loan is such a useful and easy tool to improve your financial condition and health of the credit sheet.
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