If you have some gold handy and been scouting for a loan, then it is time to make optimal use of your jewellery. Gold has held sentimental value for Indians over 2,000 years. As a result, people prefer preserving it for special occasions. However, the perception is fast changing. More and more people are using gold to fund their short-term goals for cheaper interest rates. But as with all investments, complete knowledge is essential before entering the financial agreement.
What is a gold loan?
If you are a short-term credit seeker, then gold loans are your best buy. You get 80 per cent of the value for your gold. For this purpose, the banks and non-banking financial companies (NBFCs) check the metal purity. You can provide any gold: biscuits, ornaments and coins, as collateral. The gold loan interest rate is competitive and is usually repayable in 12-60 months. If you are over and above 18 years old, you can apply for the loan.
What are the advantages of the gold loan?
• You can get a gold loan despite holding a bad credit score since they are secured
• You have the option to pay off the interest first and the principal amount by the end of the loan tenure
• If you are from the field of agriculture, you receive further discounts on the interest rates
• The documentation process is hassle-free as you offer gold as security. You would only have to produce your ID and address proofs
• The good thing about a gold loan is that the fluctuations in gold rate do not affect the credit in any way
Points to remember before taking a gold loan:
• If there is a default in the gold loan payment, the lenders can sell your gold and recover the pending amount
• Also, if there is default payment from your end, the lender will levy additional interest charges on your loan amount
Is it better to take a gold loan from banks or NBFCs?
Before you decide whom to approach for your gold loan, check the various schemes online. Compare the interest rates using the gold loan EMI calculator. Zero down your desired loan and then apply for it. However, you have to consider the following points:
• Banks charge lower interest rates than NBFCs
• NBFCs provide your flexibility regarding repayment of loans
• NBFCs disburse the loan in as less as 5 minutes while banks take up to 4 hours
• Most of the NBFCs do not levy pre-payment penalty. However, banks do charge for the same
Hope all your queries pertaining to the loan are crystal clear. Happy gold loan hunting!
What is a gold loan?
If you are a short-term credit seeker, then gold loans are your best buy. You get 80 per cent of the value for your gold. For this purpose, the banks and non-banking financial companies (NBFCs) check the metal purity. You can provide any gold: biscuits, ornaments and coins, as collateral. The gold loan interest rate is competitive and is usually repayable in 12-60 months. If you are over and above 18 years old, you can apply for the loan.
What are the advantages of the gold loan?
• You can get a gold loan despite holding a bad credit score since they are secured
• You have the option to pay off the interest first and the principal amount by the end of the loan tenure
• If you are from the field of agriculture, you receive further discounts on the interest rates
• The documentation process is hassle-free as you offer gold as security. You would only have to produce your ID and address proofs
• The good thing about a gold loan is that the fluctuations in gold rate do not affect the credit in any way
Points to remember before taking a gold loan:
• If there is a default in the gold loan payment, the lenders can sell your gold and recover the pending amount
• Also, if there is default payment from your end, the lender will levy additional interest charges on your loan amount
Is it better to take a gold loan from banks or NBFCs?
Before you decide whom to approach for your gold loan, check the various schemes online. Compare the interest rates using the gold loan EMI calculator. Zero down your desired loan and then apply for it. However, you have to consider the following points:
• Banks charge lower interest rates than NBFCs
• NBFCs provide your flexibility regarding repayment of loans
• NBFCs disburse the loan in as less as 5 minutes while banks take up to 4 hours
• Most of the NBFCs do not levy pre-payment penalty. However, banks do charge for the same
Hope all your queries pertaining to the loan are crystal clear. Happy gold loan hunting!
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