Gold loans are the easiest and the most convenient way of availing immediate loan amounts. These loans help you financially in case of trouble. It might be a medical emergency, month-end blues, unsuccessful business outcomes, marriage etc. Gold is the best security that can be used to process gold loan amounts from the bank.
Different types of loans come up with different charges, these charges differ according to the policies levied by different banks and NBFCs (Non Banking Financial Companies). So, getting a loan could be easy but the costs attached to it might not always be under the financial capacity of a person. That is when an economical and an easy to get loan is required. That is when gold loans act as the saving grace.
Ways to avail the best gold loan application
Checking creditor's capability - It is extremely important to check the credibility of the lender. The borrower's credibility is duly checked before lending him/her the loan amount. But what if the creditor turns out to be a fraud? Thus people should always apply for a loan from Banks or NBFCs.
Compare your options - Doing prior homework before applying for a gold loan is important and turns out beneficial in the long run. Compare the loan amount provided by different Banks and NBFCs by their interest rates and gold loan per gram.
For instance,The HDFC gold loan interest rate starts from 9.90% to 17.90%.
Prior knowledge of quality and quantity of gold accepted - It is very important to research and understand what is the minimum amount and the quality at which the bank provides loan. Creditors provide loans on gold which ranges between 18-22 Carat or above in purity.
Consider the repayment structure - The borrower should understand and research the repayment of the amount. This will help in applying for the loan amount accordingly with no risk of debt trap. In some cases, there is EMI repayment, which includes both interest and principal amount.
Consider LTV calculation - LTV stands for loan-to-value ratio. This is used by the lenders to express the ratio of a loan to the total worth of an asset. Thus, to get maximum results, it is better to consider and gain complete knowledge about the LTV ratio.
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