THINGS TO KNOW BEFORE CHOOSING GOLD LOAN

There is no uncertainty about the way that a Gold Loan can act as the hero on the occasions when you need urgent funds. Given by several banks and financial institutions, a gold loan can be profited by any individual who has some idle gold sitting in their homes. People can get the loan amount at an affordable rate of interest against submitting the gold to the lender. This makes a gold loan the easiest and the best loan option today. Be that as it may, as simple as it sounds, there are a few things many individuals neglect while applying for a gold loan.

If you are someone who is confronting a dire requirement for funds and hoping to choose a gold loan, some factors must be kept in mind before selecting the best lender suitable to your requirements.

Major important factors are as follows-

THE CREDIBILITY OF THE LENDER :

An individual needs to present the gold as insurance or security to the loan lender. The bank will return the gold ornaments and gold coins after the reimbursement of the loan. A few banks likewise discharge the gold on part repayment of the loan in the event of any crisis. Yet, has anyone at any point thought about a circumstance where the moneylender is a cheat, and surprisingly, after making the full reimbursement, one would not get the gold back?

All things considered, to stay away from such circumstances, an individual should check the credibility of the moneylender from which he/she is deciding on a gold loan. Make sure to pick the loan specialist as a presumed public or private bank or Non-Banking Financial Companies (NBFCs) so the gold remains safe and protected with them

LOAN AMOUNT :

This is perhaps the main variable to take a gander at while applying for a gold loan. A few moneylenders give gold credits however the gold advance sums contrast starting with one bank then onto the next. Know this thing that no moneylender gives 100% of the gold worth as the credit sum. It as a rule goes from 65% to a limit of 85% – 90% of the general gold worth.

For example, if your gold’s net value is INR 10 Lakh, you can get a maximum loan of INR 9 Lakh. So, it is essential to check the specifications of each lender so that you can make a better decision while finalizing the highest Loan-to-value (LTV) ratio.

RATE OF INTEREST :

It is the most vital factor in choosing the repayment sum as a result of the immediate impact it has. In this way, consistently pick a loan lender with the most reduced interest rates so that the customer doesn't have a higher repayment sum. Different institutions can provide different rates of interest. For example, the Canara Bank gold loan provides a maximum of INR 20 lakh gold loan interest rate at 7.65%.

REPAYMENT METHODS :

This is an important factor that people tend to oversee while applying for a gold loan. When compared with different loans, gold loans give pretty adaptable repayment strategies to clients. Thus, one should check the repayment strategies that the bank is giving on the gold loans. Some institutions let people pay the interest amounts at the time of loan application and allow to pay just the principal amount at the end of the tenure, while some let the borrowers repay the interest amount in installments during the tenure and then pay the principal amount at the end of the tenure. So, it is essential to check the type of repayment method that the selected lender is giving an option for.

REPAYMENT TENURE :

For the most part, the repayment tenure of the gold loan is short– going from 12 to 48 months. Along these lines, it is essential to check the reimbursement limit before choosing a gold loan plan from any moneylender. Since any missing installment will affect the credit score and the customer may need to pay some additional charges as well. So, remember this thing while at the same time picking the tenure and the repayment method for the chosen lender.

CONCLUSION :

So above are the important factors to keep in mind while applying for a gold loan with any of the chosen lenders. Also, it is essential to keep in mind, the documents required for a gold loan are 1. Two passport-size photographs, 2. Identity proof such as PAN card, Aadhar Card, or Voter ID Card, 3. Address Proof ( Electric Bill/ Gas Bill/ Telephone Bill).

What all mistakes should I avoid during a Car Loan?

Concentrating on the best deal for another car, individuals often forget to consider the best value for a car loan. A common mistake that individuals make is choosing the vehicle before dissecting the available finance options. Selecting the car first tends to make individuals more susceptible to tolerating less-than-stellar loan deals.

Some of the common mistakes that one needs to try not to choose before a car loan are:

Not Selecting the Shorter Term

Spreading out a loan throughout a more extended period ensures lower monthly payments; however, in the end, you will wind up paying more than what was needed in terms of the interest. While applying for a car loan, attempt to choose the shortest time you are OK with to limit interest outflows and maximize loan benefits. Use the automated EMI adding machine available on the website to track down the most suitable choice for you. With the vast number of loans available in the market today, it should not be tough for you to track down the one that is perfect for your needs.

Not Shopping Around

The applicant needs to do his/her homework before going for an application; this makes the whole process simple. While tracking down a decent deal on another car is vital, it is significantly more so to arrange reasonable and affordable financing. More often than not, buyers focus mainly on discovering a vehicle and don’t set aside sufficient effort to shop for the best car loan deal. On the other hand, some seize the notice of dealer financing. The reality, however, is that one should always check all available options to see who offers what advantage and afterwards select a deal with the best interest rates for a car loan and get a car loan approved that suit the loan applicant’s scenario.

Focusing just on the EMIs

Some loans have longer tenures and smaller EMIs amounts. Just because the EMI sounds affordable and reasonable does not imply that it is the best alternative for you. Ensure that you take a gander at the higher perspective, such as how much interest you are paying altogether before you settle on a decision based solely on the EMI sum.

Selecting the “ No Down Payment” Option

Not making a down payment on a car sounds highly tempting. It means that you can drive away your new machine without paying a single rupee. This deal is exactly what it seems like - a gimmick to draw shoppers. The truth is that this deal is more similar to a ‘less now, more later’ deal. Zero down payment means that you have to pay more EMIs in future and with a higher interest rate. Moreover, there are also hidden charges that individuals generally forget to factor into this question.

Going with the ‘Gut’

There are instances when you have an ironclad cutoff to the financing that you need to go for. Yet, sales talk is explicitly designed to separate that resolve. Several deals of offers may be offered to you, and you may discover your resolution slipping because it’s just about somewhat more cash. Sometimes, excitement may make you stretch your pocket and purchase a car for which you need to spend slightly more than your original budget. Going with the ‘gut’ may be an incredible choice for some situations, however not for car loans. Logically assess everything and hold your emotions in check.

Here is a list of document required for a car loan:

• Identification proof

• Proof of age

• Address proof

• Application form

• Passport size photograph

• Income proof

• Bank statement

• Proforma invoice

• Signature verification proof

Pre-approved Car Loan

Many people set their sights on the car that they desire to buy before applying for a car loan. Finding out that a lender won’t let an individual borrow enough for buying a car of their choice can be pretty disappointing. Some individuals try to prevent this from happening by getting a pre-approved car loan. A pre-approved car loan means that the lender signs off on loaning him or her a certain amount of money. Pre-approval does not guarantee that one will get their car loan but it might help narrow one’s search by giving one a ballpark figure that he or she might be able to borrow. An individual will still need to make sure of the fact that their financial circumstances remain the same between the time they get pre-approved for a car loan and when they are fully approved. But before that one should also check the Car Loan Interest Rate offered in the market. Getting a pre-approved car loan involves some of the checks that are to be conducted before a car loan is completely approved. One needs to submit their identity documents, as well as bank documents or pay slips in order to prove that they have the income to repay the loan. Also, the lender might wish to do a credit score check. If the lender is satisfied that the borrower is likely to repay the loan then they will offer a pre-approval, which is a conditional consent to the loan that is usually valid for a few months.

One will feel the need to shortlist a car that is within their timeframe and then apply for the car loan. The lender will further check that the selected car meets their lending criteria, and also confirm that the information provided for their pre-approval has not been changed significantly. For example, if a borrower is buying a used car with a pre-approved loan, then some lenders might insist that it should not be older than seven years. Again if the borrower has lost their job or business income has decreased the lender might require to explain how the individual plans to make up for the lost income before approving their car loan.

Considering that only a few lenders offer a pre-approval for car loans one might not find a suitable lender in order to get a car loan pre-approved. Nevertheless one might want to look at the advantages and disadvantages of a pre-approved car loan. Some of the advantages are listed below:

• It can simplify the searching for a car by helping to specify a suitable price range.
  

• It gives one the confidence of knowing that he or she can get a car loan before they begin looking for a car.
  

• It can help an individual negotiate with the car dealers as they do not need to depend on them for financing options.
  

On the other hand, there are a few disadvantages that are jotted down below:

• One can get a pre-approved car loan from a few lenders which mean that one might not have the option of holding out for better loan terms.
  

• Pre-approval involves a credit score check which means that the lenders will be recorded as an inquiry in their credit report.
  

• Pre-approval of car loans does not last very long which means that an individual has to find their dream car faster.

One can apply for a Car Loan pre-approval online but in order to do so, they will have to provide documents and financial information instantly. Before applying for a pre-approval one can use the car loan calculator to calculate the interest rates of the various institutions that are offering pre-approval of a car loan. One might also feel the need to do some homework before getting started on the car loan pre-approval. One can research the type of car they want to buy and estimate its costs and additional expenses, which include stamp duty, insurance, and registration costs. Through this exercise, one will be able to estimate how much one needs to borrow.