Gold loan from ShubhBank is emerging as one of the popular ways to get quick funding for your needs and requirements. In India, most of the people hold the gold as a saving instrument but it is also increasingly being used as a credit tool these days. If you are looking for gold loan, there are some common mistakes to avoid while applying for a gold loan that are listed below to have a smooth loan journey.
High interest rate to get high LTV: The loan quantum depends upon the market price of gold per gram. Every lender allows for LTV of a maximum 75% and most of the lending institutes provide highest LTV offers at significantly higher rates of interest. Beware, always chose the deal which provide you higher LTV ratio at lower interest rate. To exemplify, ShubhBank offers “Online Gold Loan at Competitive Interest Rates“ with highest LTV.
Interest rate calculation: Some of the lending companies often market their loans to show optically lower rate of interest and subjected to terms and conditions, you might end up paying a higher interest rate. There is also a term called jumping interest rate, where the interest jumps with the passage of time or on missing your EMIs. It is advisable to choose fixed interest rate and do check how your interest rate will be calculated.
Hidden charges: Multiple lenders hide a lot of charges in their loan agreement that commonly includes processing fee, foreclosure charges, penalty charges and auction related charges. Always counter in on additional charges to know the actual financial cost of your loan and these charges can be burdensome. You may “Apply For Gold Loan“ at ShubhBank which offer transparent loan schemes with no hidden charges.
Wrong tenure: It means for the loan duration and may vary from 3 months to 3 years, so always chose a tenure that suits you the best. The longer tenure is not better always and ultra-shot tenure can lead to auction very soon. On the other hand, choose an optimal tenure from 6 months to 1 year. The interest calculation is always linked with your tenure; therefore, choose wisely depending upon your cash flow visibility and repayment capability.
Auction terms: If you ever default on the loan repayment then your gold will end up in auction. Your lender will be entitled to auction the pledged gold into the market to recover their loan money along with interest rate. You should be entitled to a prior legal notice before auction. In case, if you are short of cash flow to repay the loan, choose either to renew your loan or apply for a takeover with some other lender. Hence, it will save you from the auction of your gold.
As a borrower, you have to be aware and always take an informed decision. Don’t fell as a prey to marketing gimmicks and always research for best lenders and deals before taking a loan. ShubhBank has very handy deals of “Gold Loan In India“ and you can go through them on our website.