If you own gold jewellery and need funds urgently, applying for a gold loan is a smart choice. You can apply for gold loans online, with just a few clicks, and enjoy low interest rates and fast approvals. Whether you need funds for a personal emergency or a business need, availing a gold loan is a simple, secure, and convenient way to meet your financial requirements in a timely manner.
Gold Loans: A Flexible Financial Tool
Gold loans, also known as loans against gold, would enable you to borrow funds by pledging your gold ornaments as collateral. The loan amount you receive would be based on the current market value of your gold. Hence, checking the gold loan amount per gram is essential when applying for such loans. It basically refers to the amount of money a lender provides for each gram of gold jewellery pledged as collateral.
Gold loans are commonly available to meet short-term financial needs. They are processed much faster than unsecured loans, making them an excellent choice for urgent financial requirements. The pledged gold ornaments remain safe with the lender and shall be returned to you after you fully repay the loan amount with interest. Gold loans are offered by both banks and non-banking financial companies (NBFCs) across India. All lenders offering such loans follow guidelines set by the Reserve Bank of India (RBI).
Dos and Don’ts for Applying for an Instant Gold Loan
Do Your Research and Compare Options
When applying for gold loans, you must research and select a well-established, reputable financial institution. Leading financial institutions offer varying loan amounts, interest rates, and repayment plans for gold loans. You must carefully compare the offerings of at least three to four loan providers to get the best possible deal. Tools like gold loan EMI calculators can significantly help in the process and make it easier for you to choose the right loan option.
Don’t Overlook the Fine Print
Before signing the gold loan agreement, you must thoroughly read the terms and conditions mentioned there. You must understand the clauses associated with the interest rates, repayment policies, foreclosure charges, and more. Neglecting such details can lead to financial complications down the line.
Evaluate Interest Rates and Additional Charges
Gold loan interest rates may vary between diverse lenders. Hence, before committing to a loan, you need to compare interest rates, and understand the impact of processing fees, service charges, and more on the overall cost of the loan. Even a minor reduction in the interest rate can reduce overall repayment costs significantly, while any kind of hidden charges would add to your financial burden.
Do Not Pledge Gold without Proper Valuation
Gold prices keep fluctuating based on market conditions. Prior to applying for a loan, you must make sure that your gold ornaments are appropriately valued and that the lender offers a loan reflecting their current market worth.
Understand Your Repayment Options
Gold loans often come with flexible repayment options. You must select a repayment plan that effectively aligns with your financial situation to repay EMIs in time, avoid unnecessary penalties, and maintain a strong credit score.
Avoid Overborrowing
You must always borrow the sum of money you need, even if you are eligible for a higher loan amount. Over-borrowing would result in a higher EMI amount and interest payments, making it difficult for you to repay the loan on time.
When applying for gold loans, you must carefully consider the dos and don’ts discussed above. These pointers would help you select the right loan option and keep your repayment burden low.
Author bio: The author is a financial advisor who has more than a decade of experience in helping individuals, families, and businesses achieve their financial goals. He has authored articles in multiple prominent publications throughout his career.
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