Guidelines for the best Gold Loan

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This gold loan is a multipurpose loan, and you can make money, gain money and be as rich as you want to be. Banks and Financial institutions use this to lend a hand to those in want and need. Banks and Non-Banking Financial Institutions(NBFCs) have been providing this service for more than a century, and availing of a gold loan is struggle-free and convenient. Still, if you are a first-time borrower or if you’ve been a victim of a lousy gold loan, then a definite book of guidelines is required.

 

Things to know before availing of a gold loan

Lender’s credibility: A gold loan is a secured loan, which means there is collateral (here gold) and that it’s going to be in the lender’s hand for the loan term. So making sure the loan is in the safest care is a necessity. Do a thorough background check on the lender you want to avail on. Please make sure they are legitimate and trustworthy and have a considerably large number of customers, as they indicate their popularity.

NBFC or Banks: Commonly, there are two types of lenders, NBFC and bank, from which you can choose. NBFCs charge high interest rates compared to banks, but NBFCs are more liberal with the loan amount. Therefore choosing the right financial help is of utmost importance.

Gold loan purity: The gold article you decide to avail loan must be in the purity range of 18k-24k. Anything less than that is not accepted by almost all banks ad NBFCs. The higher the purity rate, the more will be your gold loan amount. And the more you are eligible. Few banks and NBFCs don’t accept gold articles such as bar or coins, but other than that, every other ornament is approved.

Overdraft facility: Gold loans have this scheme known as overdraft facility where the money you borrowed can be used like a credit card, availed anyplace, anytime. There is no prepayment charges and no necessary to pay the Equated Monthly Instalment on time; anytime you wish, the interest amount can be paid unless the bank or NBFC makes you. Then it should be immediate; if not, there might be some severe interest charge above the actual interest rate.

Two of the broadly used repayment options in a gold loan are bullet repayment schemes and an EMI scheme. The former, widely known as the balloon loan, is where you have to pay the principal amount and the whole interest rate at once during the end of the tenure. If opted, the latter pays the EMI on time each month and the principal at the end of term. Very few banks offer this third scheme known as partial payments, where each and every month, a part of the principal and the interest is paid till the end of term. This scheme is relatively expensive than the above mentioned two others.

Gold loan features:

IIFL Gold Loan is offered by the non-banking financial institute -India Infoline with a minimum loan amount of Rs.3000 with a maximum tenure of 11 months. Few banks even offer a minimum loan of Rs. 1500 going as high as a crore. The most offered tenure is two years maximum, while a few banks even provide the loan for 4years. The interest rate for the loan is something you have to watch out for; choosing the interest rate you will pay is a prime thing. The interest rate primarily lies in the range of 7%-14%. And IIFL charges a minimum of 12%p.a.

Gold Loan per Gram is the loan banks and financial institutes that offer money for a single gram. The rate usually ranges between Rs.3,520 and Rs 4621, and a gold loan calculator is available on most banks ad NBFCs that helps give the rough rate of amount, tenure, and interest rate.

 

Conclusion

Availing a gold loan is easy and stress-free, but one has to remember that the gold is collateral and that if the due amount is not paid regularly, the banks and NBFCs have the right to auction the item.

 

 

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