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Talking about gold loans, the main idea behind a gold loan is to pledge the gold you have and get money to take care of your expenses. Availing a gold loan requires you to have gold that you want to engage in hand, along with a few documents that you would have to submit.

These documents involve the usual application form, passport-size photographs, identity proof, income proof, residence proof, etc. All these documents are collected to verify if you have an ordinary income and a job that would help you pay the interest for the money you are about to borrow. After the processing of your documents, the Bank would then conduct a purity check on your gold and then, depending on the gold rate today, that is the Gold Rate Today that is the day of your application of the loan, they would give you the amount that you had requested.

However, how do you know which Bank is the best to avail of a gold loan?

The answer to this is straightforward. You just don’t go by the advertisements or people’s word about which Bank is the best. You need to go over a few steps before deciding which one is the best for you. Those are:

1. You need first to check the credibility of the Bank. If they are entitled to do a parity check on the gold that you are pledging, then you are also entitled to do a background check before proceeding with the loan.
   
   
2. Make sure it is an RBI regulated bank. This would give you more insight into the credibility of the Bank and would give you a sense of satisfaction and security that your gold is in a safe place.
   
   
3. Check multiple banks. Do not just stick to one Bank and try and somehow convince yourself to get a loan from there. There are plenty of options available in the market offering excellent gold loan offers like the Federal Bank Gold Loan. There are various other options.
   
   
4. Look thoroughly before deciding on the Bank which suits your needs and offers interest rates that would fit your budget. Make sure that you are not compromising on your needs and wants just to avail of a gold loan. You play a very important part in this process.
   
   
5. Once you’ve decided on the Bank, go over all the schemes and understand their method of operation. Ask questions, get them clarified and make sure you are satisfied with their answer before proceeding further.
   
   
6. Cross-check the mode of repayment and if any enhancement facility, loan extension period and delayed repayment is permitted. Because you do not want sudden shocks of people talking about selling your gold.
   
   
7. Adding on to the previous point, make sure to check if the Bank is asking you to pay only the interest rate on a monthly basis or the interest rate along with a part of the principal amount every month. If it is the latter, then it would turn out a lot more expensive than what you would have planned for, and you might not necessarily be prepared for the same.

Conclusion:

No one bank is the best for all the people applying for a gold loan. Each Bank has its differences in terms of interest rates, loan tenures, flexibility, schemes offered and so on. You need to carefully read about the Bank and relate it to what you want and then decide if you want to proceed with applying for the gold loan or not. The Bank that meets your said needs and gives you the money that you require is the best Bank to avail of a gold loan.