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WHAT CONSEQUENCES ONE MUST FACE WHILE NOT REPAYING GOLD LOAN?

Posted on Monday May 31st, 2021

A gold loan is sanctioned by various lending institutes against gold to meet urgent financial needs. One needs to pledge gold articles as security against loan and have to pay the applicable interest rates on the borrowed amount at the end of the given repayment time. The major benefits of this loan is that interest rates are much lower than other types of loans and you can Apply For Gold Loan with a poor credit history as your gold assets serve as collateral. However with all these benefits comes an important query that what if you fail to repay the gold loan? Several times, you may suffer tough times; it’s difficult to repay the loan on time. Let’s see what happens if you fail to repay the loan.

CIBIL turns bad: The credit score indicates your timely loan repayments and gives the lender an idea about if you are prompt with loan repayments. The lending institutes send your repayment data to various credit bureaus and prepare your credit report to assign a CIBIL score. If you default on any kind of loan you will surely get a bad credit score. The financial institution won’t sanction you any new loan is you have a bad credit history. If anyhow you manage to secure a loan, the rates of interest could be really high.

Penal interest: A lender may charge you the penal interest for time overdue. This is literally over and above the applied interest rate that you repay for your gold loan and this may vary for different lenders. The penal interest rate is about 1-7% for a year.

Legal action: Usually lenders don’t have problem if there are two or three slip-ups in loan repayments. If a default on EMIs happens for three consecutive months then you may get in problem. Moreover, if you ignore the warning alerts from lenders, you may get a legal notice at your provided residence. You are informed on when to repay your loan EMIs.

Auction of gold: As you have pledged your gold to serve as collateral, so you could lose your precious metal and ornaments to the lender if you default on gold loan. In case, you don’t pay back the gold loan by the final repayment date, you lose your assets as the lending institution will auction your gold items to recover the outstanding dues. In such situation, you are not allowed to stop this auction as lender lawfully recovers the dues by selling your yellow metal.

If you Apply For Gold Loan Online or offline, you may get tenure of minimum twelve months to maximum thirty six months. One may have an option to repay the loan against gold through monthly EMI or interest only. It’s all up to you. Which method you choose, you would have to renew the loan by paying processing fee. Therefore, if you are unable to repay the principal, renew your gold loan by paying levied processing fee or any difference in the market price of gold.


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HOW GOLD LOAN CAN HELP YOU IN QUICK NEED?

Posted on Monday February 8th, 2021

There are some uncertain times when unforeseen expenses can deter your monthly income towards various expenditure outlays. In such situations, most of the people turn towards their savings to escape out the period of cash crunch by compromising their financial security in the long run. Nowadays, emergence of cash loans has effectively reduced the financial burden considerably as they are extremely helpful to get short-term funding on an emergency basis. Moreover, the minimum eligibility criteria associated with such loans allow potential loan seekers access the funds without much hassle.

The perspective borrowers can eliminate their emergency requirements easily by opting for popular funding solution like gold loan these days. The gold loan can help borrowers meet their urgent requirements by offering better convenience as compared to other funding options. ShubhBank has streamlined the loan processing of yellow metal to quite an extent. Some of the perks are offered by us to boost the convenience of availing such loan which is listed below:

High LTV ratio: Loan to value ratio is the percentage of the pledged security’s total value that can be secured as a loan at maximum. To exemplify, if the precious metal you pledge is valued at Rs. 20 lakh, and the LTV ratio offered against it is 75%, you can avail Rs. 15 lakh as the loan quantum. In this context, you can avail the highest loan to value ratio against your yellow metal at nominal interest rates.

Minimum documentation requirement: To take a Loan against Gold you will neither need to undertake an elaborative paperwork nor comply with any strict eligibility criteria. In gold loan, the loan quantum disbursed is based solely on the value of gold ornaments you pledge, you can secure it without submitting any documents like your income tax return proof and such. Apart from this, the lender does not take your credit score into account to deem you eligible for the borrowing.

Assured security of the collateral: You can give away the hesitation of pledging your gold to take the loan with lender’s uncompromising measures to secure your precious metal. To illustrate, the yellow metal collected from you as a security is deposited to the lender’s vault where it is stored safely until the time you repay the loan. Sometimes, it receives additional security through an insurance scheme offered at no additional charges.

Flexible repayment term: If you Apply For Gold Loan you are enabling to opt for a repayment tenure ranging between few months to years. In such period, you only have to pay the interest accrued against the quantum availed and the rest as bullet payment after the loan tenure get completed as compared to other secured types of loan.

With such great benefits, gold loan makes for the most convenient option when it comes to meet any type of cash requirement- whether long term or short term. You must have to understand that how gold is valued before you apply for it to ensure that you are aware of the entire loan procedure.


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HOW TO USE THE GOLD ORNAMENTS TO GET A LOAN?

Posted on Saturday December 26th, 2020

A gold ornaments are not just a priced possession or an investment but also a good way to secure funds. Indian people have a sweet spot for yellow metal; therefore, it is one of the largest gold importers of the globe. It also provides you the sense of financial security at the times of emergencies by selling your gold jewellery to meet the obligations. Nowadays, you need not to sell your precious metal as you can take a loan against it. Here in this article, you will come to know how to use your gold ornaments to get gold loan.

As per name, a Gold Loan helps you to borrow money by pledging your priced possession with the lender. One can repay the loan amount within the fixed time period and can get your gold back from the particular lender. The financial institutions usually give loans of only a fixed percentage of the market price of gold but one is not allowed to borrow money of the entire value of the gold you put as collateral. In case, you are facing a financial crunch, a gold loan makes much sense.

A loan against gold unlike other loans has a minimum set of eligibility requirements. You only need to be 21 years old and should be the genuine owner of the jewellery. The financial institutions does not require to consider factors as such your income and credit score as you are keeping your gold as collateral against the loan money. In case, you are unable to repay the loan, the particular lender has the right to auction your jewellery to recover the dues.

Gold loan is a secured type of borrowing as the application process is very quick. Even, when you Apply For Gold Loan the amount will get disbursed on the same day you apply for it. to avail this loan, you can either visit to a nearest branch of the selected lender or you can apply it online through the website. You just have to fill in the application form and upload the documents such as ID proof, residence proof to take the loan. The maximum amount of loan is calculated depending upon the value of your gold. If you get approved the amount will get disbursed in few hours after applying it.

Most of the lenders only accept the yellow metal with the purity ranging between 22 to 24 carats. Few lenders also accept gold bars and coins with a purity of 99.99%. It is a short-term loan with a short period of time. All lenders have their own minimum and maximum borrowing limits for the loan. The interest rate on the gold loan is minimum than other loans depending upon the amount you borrow.

Life is uncertain, so there are several events when you need quick funds that you might not readily have but if you have gold ornaments, a gold loan can be an excellent option. Gold loan is one of the convenient ways to access needed funds to meet your emergencies.


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WHY GOLD LOAN DEMAND INCREASED POST LOCKDOWN?

Posted on Thursday November 5th, 2020

The income of most of the middle class families had squeezed due to job loss, pay cuts and undefined income resources with the closing of business amid Coronavirus pandemic lockdown, more and more individuals are opting for gold loan. Some people need cash to run their monthly expenses while others have to pay the bill. People are not applying or moratorium as it will end up in loan burden with the accumulated interest. Those who needed money for their survival are mortgaging their gold to arrange funds in shortest possible time. Now the lockdown has uplifted, people are searching for the lenders for gold loan to get cash in hand. There are some factors which have increased the demand of Loan Against Gold.

Lower rate of interest: It is much cheaper to secure a gold loan than borrowing a personal loan and credit cards which costs huge and results in debt trap if not managed properly because the interest rate on personal loan and credit card ranges from 12 to 16% and from 15 to 30% per annum respectively. If the borrower is not able to repay the loan, it will end up in huge accumulated interest, stress and lastly, it can end up borrowing again to pay back the existing loan.

Surging of the gold price: Gold loans are easily available and comparatively cheaper and you can secure the funds in short time. Apart from such benefits, the huge surge in gold prices which make it more attractive and affordable. The domesticated gold prices have kept on rising sharply in last couple of months. The soaring prices in lockdown have unlocked huge value for gold mortgages for potential loan seekers who are looking for funds and since prices of gold at are at peak mortgaging their yellow metal which can get them the best of the price.

Increased LTV ratio: The gold loan lenders surged after RBI decided to ascend the permissible loan to value ratio (LTV) for loans against gold to 85% from 75%. This aspect of gold loan has made it favorable for individuals who are financially hit by COVID-19 pandemic and are looking for liquid funds to meet their requirements.

Instant processing: When you Apply For Gold Loan lenders evaluate it and credit the loan amount into your account and hold your metal until you repay it back. Nowadays lenders disburse the loan in few hours after you get approved for it and some of them have eliminated processing fees too.

Now when lockdown has been lifted, the gold loan sector is expecting an increase in demand for loans against gold as majority of middle class families are looking for liquid funds and working capital to push their businesses to normal which are hit by the corona virus pandemic crisis lockdown. Therefore, get in touch with ShubhBank for quick and hassle-free ways of getting a gold loan. Your gold will remain at secure place with lender throughout the tenure and you get it back, once you repay it back to the lender.


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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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WHICH IS THE BEST OPTION- SELLING YOUR GOLD OR GOLD LOAN?

Posted on Thursday August 27th, 2020

It is always a mind boggling to decide over, whether to sell the gold or to take a loan against gold when someone needs money and he/she doesn’t know what needs to be done. Many thoughts start juggling throughout minds and questions surround us that should I sell my gold, will I get the right value of my yellow metal or should I apply for a gold loan? Here in this article, we will guide you about that which is the best option- selling your gold or gold loan?

Gold is not just a shiny ornament but it also carries feelings, legacy and emotions than just being an asset. Therefore, most of the people are hesitant about giving away their asset when there is a need of funds. It is always a better option to take a gold loan if someone wants to use it. The main disadvantage of selling gold is that you are only paid for jewelry and you lose the value of make in charges which adds up as significant part while purchasing the same jewelry. The emotional sentiments also counts up as one thinks to start when he/she will be able to buy the gold back while the gold prices are increasing.

Benefits of choosing a gold loan
Gold loan is the secured type of loan, where the lender only look for quality and quantity of your gold rather than your creditworthiness when you Apply For Gold Loan and sanction the amount in your bank account as per your requirement. Once you clear the repayment, you can get your gold ornaments back. This loan will save your time and unnecessary stress of selling your asset which you are not being able to buy soon. Some of the benefits associated with this loan are given below:

Higher Loan Amount: You can get higher loan amount in case of gold loan as it is a secured loan. The maximum limit of gold depends upon the quantity, you pledge against it.

No Need of Credit History: This is the major benefit of availing a gold loan as one need not to have a credit history. Even if you have a low or zero credit score, you shall be granted with loan. If you default on repayments, then lender can recover the outstanding money by selling your gold.

Nominal documentation: One only needs to provide the KYC documents either you Apply For Online Gold Loan or offline. With nominal paperwork, loan amount is sanctioned quickly within a short period of time. Gold is an over the counter product, just pledge your gold ornaments with lender and walk out with cash.

You can take a gold loan by paying very less interest rates and your precious metal will also be in safe custody. Therefore, if one needs to fulfill their requirements or to fund any emergencies, then taking a gold loan is better option than selling your gold. The loan processing is very easy and will be completed in less time.