THREE IMPORTANT CONSIDERATIONS BEFORE YOU CHOOSE GOLD LOAN

From the very onset of one’s life, one must have heard that investing in gold can turn out to be a great asset because, at the time of need, you can stabilize yourself financially by selling the said gold. In contemporary times, this got a new reality as many companies are coming up with gold loan schemes, drafted so that it will hugely benefit the customers. NBFCs like Muthoot Fincorp provide affordable interest rates or rates that are lesser than the banks. But before going forward with the loan, there are specific key points that the customer needs to understand. Some are mentioned in the article:

Among the different reasons that should be considered before applying for a gold loan but the most basic ones are given below:

Banks or NBFCs- In the gold loan case, it is essential not to take it from small gold jewelry shops because most of them are not certified to give gold loan. It is advised to seek loans from banks or NBFCs legalised to give loans. NBFCs such as Muthoot Fincorp’s interest rates are more affordable than banks who charge a bulk. Moreover, the paperwork which comes with taking bank loans is colossal.

Type of Gold, charges, and interest rate structures- A lot depends on the purity of the gold; the purer the gold, the more money the person will apply for the loan. The institution that is lending, be it a bank or any other NBFCs, will target a minimum of 18-carat gold.

If the person is taking a loan against jewellery, the stones or other gems attached to the body of the jewellery would not be considered. Only the gold will be counted, and the money will be offered against that. Any lenders do not accept bars of gold. Only coins with 99.99% purity are accepted.

Coming to the special offers or payments, as far as pre-payment is concerned, most of the banks or NBFCs do not have any pre-payment clause. Individual banks charge 1% if there is an overdue. At the time, the gold prices are skyrocketing. But in the future, if the market turns down, the person applying for a gold loan will need to provide extra gold.

The ideal loan rate is considered to be 75% of the value of gold. If by any chance, the person taking the loan cannot repay on time, the institution lending the money has the full authority to action the gold. But this is done after repeated reminders.

Repayment options- NBFCs provide several repayment options that depend on the income of the person. The loan’s interest is not quite huge so that the person can quickly provide the amount. Except for the monthly installment payment scheme, the bullet scheme allows the customer to pay the interest amount upfront. Thus, in the repayment scheme, the person will only have to return the principal value.

GOLD LOAN CALCULATOR 

Muthoot gold loan calculator is present in many of the sites, which helps the customer digitally calculate the interest rate and the EMI against the gold they are offering. It allows the customer to pre-plan their financial strategies and save the amount of the monthly installment beforehand so that when the due date arrives, they will already have the money in hand. This way, they would not go through any crisis or investing without thinking it through. Many NBFCs like Muthoot Fincorp have a Gold loan EMI calculator, which benefits the customers.

CONCLUSION 

Gold loans are straightforward to apply for and process, and with the help of upcoming online sites, the process has become more comfortable. The eligibility criteria, the rates, and the monthly installment amount is already given on the site, be it a bank site or NBFC one. Gold loans are approved faster and without any hassle. But it is sincerely advised to the customers