Financial crises are inevitable. With numerous options available to mitigate this crisis, gold loan stands as an attractive option. As a rookie, the credit and the criteria involved around it can be bewildering. Here is comprehensive coverage that will assist you in understanding and narrowing down the right lender for your gold loan needs.
What is a gold loan?
Among the several immediate financial aids available in the market, gold loan stands as a prominent option. Unlike the unsecured personal loan, which involves exorbitant interest rates, the gold loans are secure with affordable interest rates. Since the applicant has to submit their gold ornaments as collateral, lenders provide credit at better and workable interest rates. The loan against gold is sanctioned based on the weight and purity of gold. Some lenders provide express gold loan facilities and online gold loan facilities, which further eases the procedures involved in procuring the loan.
Selecting a Viable Lender for a Gold Loan
1. Interest Rates
As there are multiple lenders in the arena offering gold loans, it becomes a real stamper for an applicant to narrow it down to a viable and flexible lender. Gold loan Interest calculator is an easy criterion that will help an applicant choose a lender. Although the interest rates involved are lesser compared to their unsecured counterparts of personal loans, one should select a secure lender that provides a reasonable gold loan interest rate.
2. Minimal Document Requirements
In this digitised and fast-paced world, all applicant’s desire for a loan process that is simple and quick to apply. Before co-operating with any lender, understand their terms and conditions and the documentation procedures involved. Some lenders offer gold loans with minimal documentation requirements.
3. Repayment Flexibility
Financial crunches often call for solutions that are quick and flexible. Since as an applicant, you often avail gold loans at times of emergencies, it becomes necessary that the lender provides schemes that are concurrent and flexible with your needs. There are few lenders that offers two programmes of repayment that harmonises with an applicant’s needs:
- Bullet: The bullet mode of repayment provides the applicant with the freedom to repay any amount during the loan tenure. The applicant can either pay the entire principal amount during the loan tenure or pay in small instalments.
- EMI schemes: The EMI scheme is a more structured scheme of repayment with longer tenures for repayment.
4. Miscellaneous charges involved
While applying for a gold loan, some additional charges are to be borne by the applicant. These charges include processing fee, documentation fee, and overdue charges. Applicants often oversee these charges. However, before applying or collaborating with your chosen lender, understand these additional charges involved.
Choosing a viable lender is undoubtedly a challenge, but it involves a great deal of research before narrowing it down to the best choice. As applicants receive a loan against the gold submitted as collateral, it becomes pivotal to learn about the authenticity of the lender and the security offered to the guarantee provided. Lenders such as Muthoot Fincorp provide high protection to the collateral through the provision of secure storage lockers. Besides the world-class surveillance, They also provides the lender with insurance on their collateral with easy top-up facilities on their gold loans.
6. Customer satisfaction
A lender with a fair share of satisfied customers is trustworthy. Before applying for a loan with any lender, the applicant must research through the responses posted by earlier applicants.
Gold loans are the easiest and prominent choice among borrowers for mitigating financial emergencies. Besides the ease of approval, flexibility, interest rates, and minimal documentation advantages make it a borrower-friendly credit option. However, with the rising number of lenders, an informed decision on the lender should be made only after evaluating them through the pointers as mentioned earlier.