In India, the majority of people either keep gold jewellery in their homes or in bank lockers. Gold has traditionally been considered a sound investment. It is purchased for specific holidays, given as a gift on important days like birthdays and baby showers, and is often associated with weddings. Gold is a valuable metal that maintains its worth over time, despite price swings brought on by changes in monetary policy or geopolitical circumstances.
Most Indian families still find it attractive and dazzling. Because of this, it is assumed that every household will have a stash of gold that they can turn to during difficult times. Gold is a saving that you can always rely on, whether the issue is finding money to buy a house or anything else. You may pay for a child's further education or even cover unexpected medical costs. In situations like these, people opt to obtain a gold loan. You pledge your gold items and get a loan against them. You need to repay the loan with interest within the tenure. Otherwise, the lender will arrange a gold auction and sell your gold items to recover the loan amount.
At first, getting a gold loan may appear relatively straightforward. You may believe that all you need to do is visit the showroom of a reputable gold lender and promise your gold. Thereafter you will receive a sizable sum of money in exchange. You need to repay the loan amount to prevent the gold auction. But there are several things you need to be aware of before you apply for a gold loan. You can maximise the value of your gold by being aware of this beforehand. You can also make sure that you will be able to pay back the gold loan and get your gold back.
What advantages can gold loans offer?
You must be wondering whether the best old loan is a better option for you than the other loan varieties that are currently on the market. These are a few advantages of gold loans:
- Obtaining a gold loan involves very minimal paperwork.
- When asking for a gold loan, you don't have to be concerned about your employment history, age, etc.
- There is no requirement to provide evidence of your income or your credit history.
- There are adaptable choices for repayment.
- Most gold loan lenders ask for minimal processing fees.
What are the various gold loan repayment options?
You have a variety of flexible repayment choices with gold loans, including:
- Equated Monthly Instalments (EMI), where recurring monthly payments are required.
- Bullet payments, in which the loan's interest is subtracted from the principal amount up front. This must be repaid along with the loan amount at the end of the loan term.
- Interest now, principal later refers to a loan arrangement where the interest portion is paid initially as an EMI during the loan term. And the principal portion is paid at the conclusion of the term.
How much loan will I get in exchange for my gold?
Depending on the lender, you may borrow up to 75% of the gold's worth. No lender will grant a loan for the full value of the gold. But remember, you need to repay the loan within the specified tenure. Otherwise, the lender will sell your gold items in a gold auction.