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COMMON MISTAKE TO AVOID WHILE APPLYING FOR GOLD LOAN

Posted on Monday September 28th, 2020

Gold loans are the straight forward method of raising money in case of an emergency. If you need urgent money for marriage or festivals or travel, you can formally go fall for the power of gold. You can mortgage your gold ornaments to the bank and financial institutions. You do not need to sell the gold ornaments in the market; you can simply mortgage it to the moneylender. However very often people make some fundamentals mistakes while Apply For Gold Loan.

1. Lenders Credibility: – A major blunder that people commit is taking a loan without checking lenders credibility. In a gold loan, you have cash in hand but for that, you have pledged your gold ornaments. Therefore the risk is more on the borrower as compared to the lender. You must check the background of lenders. A gold loan can be risky as a gold ornament will be kept by the lender till you pay the whole amount. So you must take a gold loan from reputed banks or financial institutions as they abided by RBI regulations.

2. Less Research: – You would be doing less research while applying for the loan. When you search online you will get many websites showing you interest rates or processing fees but take your time. Do not run for choosing the first offer. The more you will search, you will get better options.

3. Negligence of repayment structure: – Another common mistake is the negligence of the repayment structure. It is extremely important to study these structures and select the best one for yourself. Check your liquidity of cash flow so that you can pay the EMI amount other you will end up losing your gold jewelry. There are many options for paying the loan amount like Regular EMI, Only Interest EMI, and Partial repayment, Bullet repayment. You can select the best suitable method by yourself.

4. Read all conditions: – Before applying for a gold loan always remember the devil lies in the detail. So get the clear aspect of loan to value calculation. Borrowers must understand how the bank or financial institutions in calculating the value of your gold and based on that you will get the amount of loan. As a borrower, you need to have a good idea about the market value of gold. Mostly Bank offers loans at 22 carats of gold or above. If the gold ornaments are less or impure then the loan can be rejected. Gold coins are also accepted if they are above they can be accepted as collateral.

5. Not Checking prepayment charges: – While lenders do charge any prepayment fee for a Gold Loan but some charge some 2.5% from the outstanding amount if you pay before the tenure period. The prime objective of making prepayments is to save on the interest cost; incurring prepayment penalties would reduce the benefit from making prepayments. Hence, opt for a lender that charges minimal or no prepayment/ foreclosure fee.

To conclude you must remember all the above-mentioned points while applying for a gold loan.


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FEW MISTAKES TO AVOID WHILE APPLYING FOR A GOLD LOAN

Posted on Monday September 7th, 2020

Gold loans are the convenient and straight forward method of raising the funds in emergency situations. Gold is usually secured in the forms of ornaments and jewelry often comes to the rescue whether you need it for wedding expenses, travelling or starting up a new venture. Many of the banks and NBFCs are in competition to give gold loan with great benefits and you can monetize your yellow metal without selling it in the market. However, many a times people get misguided, therefore needed to look after few mistakes to avoid while applying for a gold loan.

MISTAKES TO AVOID WHILE SECURING A GOLD LOAN
– A major setback proved for the borrower is not to check the lender’s credibility. The loan quantum in gold loan is based upon the fraction of gold that you have pledged to the lending institution resulting in the increased risk factor for borrower than the lender. Therefore, you must check the background of the chosen financial entity as you have to place your gold as collateral to the lender till the time you repay the borrowed amount back. Always choose a well-established lending institution that is regulated by RBI for gold loans.

– The other common mistake made by loan seekers is not comparing the lenders in the market. If you want to compare then you can use any of the aggregator websites as many of the lenders would be ready to give the loan amount evaluated on the basis of your gold. When you Apply For Gold Loan never go for the first offer because more you compare, better the offer you may find. Always choose a lender who offers lower interest rate or higher LTV ratio.

– There is another point that needed to be avoided is being negligent of repayment structure. It is always important to understand the structure and zero in on the best that matches your needs. Be sure about the requisite liquidity and how you are going to repay either in the form of EMIs or bullet payments otherwise you could lose your gold ornaments.

– It is important to get into the finer aspects of loan to value calculation while you Apply For Online Gold Loan or apply it offline. Most of the lending institutions rely on the data furnished by their central office to evaluate the gold and to grant you a loan for up to 70% of its market value. Being a smart borrower, you must have a good idea about the market value of your gold. However, quite often these values are flexible.

At the end, you must check upon the fine print of gold loan as yellow metal has more sentimental value and ensures disciplined repayment from the borrower. Do keep in mind the conditions in which your lender can possess the gold and auction it in case of any default or any prepayment charges if you close the loan before the tenure ends. Make sure to discuss all these aspects to have a safer and convenient loan journey.


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THINGS TO REMEMBER WHILE APPLY FOR GOLD LOAN ONLINE

Posted on Monday May 11th, 2020

A gold loan is a quick way to get a loan and meet your financial needs at low-interest rates. You can opt for this loan to cater to many financial needs like child education, marriage etc. or expanding or investing in your business. Instead of keeping the gold jewelry at home or in a bank locker, you can use it as an asset by taking a loan against gold to meet the financial needs.

What is a gold loan?
Gold loan is a secured loan that is offered by banks against collateral (Gold jewelry and gold coins and any other gold item). The gold is returned to the borrower after the repayment of the loan. Generally, is gold loan is taken for short and medium tenure. Gold loan is preferred over other types of loans as it is easy and the disbursal of loan is very quick.

Eligibility Criteria for Gold loans
Gold loan is famous because the eligibility criteria is very minimal. You do not have to be employed or earning regular income or satisfy any income criteria to avail of this gold loan. The loan amount which will be sanctioned depends on the value of gold. If you are an adult and own gold, then you can get a Loan Against Gold.

The two simple ways to get eligible for loan is as follow: –
1. Your age must be above 22 years.
2. You must own the gold ornaments.


Why to choose the gold loan?
Gold loans are the best choice to get Instant Gold Loan Online. In case if you are unable to repay the gold loan then the bank has the authority to keep the gold with themselves. Here are some tips to get a loan quickly.

• Compare the interest rates: – There are many banks and financial institution which are offering gold loan. So, before choosing the best interest rate you need to search with providers.

• Check the add-on charges: – Like other loans, in gold loan also there is processing fees, documentation charges, notice charge and so on. Therefore, you need to understand this amount.

• Check the quality of ornaments: – Before applying for the loan, you have to check the quality of ornaments also. The gold should be of 22 or 24 carat. Apart from this, the Bank cannot accept other metals which are present in gold jewelry.

• Security of Gold: – You must ensure the safety of gold before providing them as collateral for the loan.

• Don’t Do LTV Calculation: – LTV is said to be advance to Value Ratio, and the creditors use it to express the ratio of the loan to a net worth of the asset. The lender uses this to check the risk involved in this. The lender will calculate the amount on this basis.


Conclusion: –
If you are planning to go for a gold loan, then you need to check all points carefully. To get the best loan rate & guide you can go for Gold loan with Shubhbank