If you need to manage a temporary cash crunch, you can opt for gold loans. Gold in the form of bars, coins, or jewellery can provide you with the required funds easily just with basic documents, i.e., Identity and address proof. There is no income proof required. Lenders do not ask for your credit scores to evaluate creditworthiness for a gold loan. Based on the purity and weight of your gold, lenders can offer you up to 75% of the gold’s current market value. Apply online and visit the nearest branch of the lending institution to hand over your loan to be mortgaged against the loan and go home with the funds you require.
Your loan against gold can be more effective if you apply for the loan after considering all important aspects associated with a gold loan. Here is the list of important factors that cannot be ignored by borrowers while looking for a gold loan. Have a look.
Important Factors to Consider While Applying for a Loan Against Gold Jewellery
1.Type of gold that can be pledged – Know Your Gold
Most lending institutions sanction a loan against gold jewellery with 18-22 karat purity. The higher the fineness of gold, the higher the loan amount. You can avail of loan against gold jewellery with all financial institutions providing gold loans.
2. Banks vs NBFCs for Best Gold Loan Value
There is a regulated market for gold loans. You can find various alternatives to get finance against your gold jewellery. You can choose from banks or NBFCs for a loan against gold jewellery. There are some leading NBFCs that primarily deal in gold loans. They offer specifically designed gold loan schemes to loan-seekers based on their financial needs. Such lenders are more liberal in offering better eligibility against your gold jewellery than banks. With Muthoot FinCorp, you can get up to 75% of the value of your gold jewellery. They offer you an online gold loan calculator to offer you a gold loan against the right scheme.
3. Understand EMI Options
There are different repayment options that lenders generally offer to their clients. You should check these repayment structures and choose a suitable one for you. Here are four common repayment structures.
Regular EMI – These are the basic monthly EMIs in the repayment structure available with every lender.
Only Interest EMI – It is also a customised repayment option to pay the interest only as EMI and pay the principal loan amount later. Generally, borrowers coincide it with the maturity date of their investments and pay the loan with maturity proceeds.
Bullet Repayment– With this option, borrowers have the option to not pay the EMI during the loan tenure. The lender allows you to repay the whole amount with interest at maturity.
You can repay your loan conveniently with the right repayment structures after careful consideration.
4. Identify the Interest Rates and Tenure Availability for Gold Loans
The interest rate for a loan against gold jewellery and tenure availability varies by the scheme you choose. With Muthoot FinCorp, you can find specific loan schemes to efficiently meet your financial needs.
Do not forget about a safe deposit vault and appropriate security measures. Your lender should comply with the defined security measures by the Reserve Bank of India.
At the end, a loan against gold jewellery can help you to overcome the tide if you consider all important aspects and approach lending institutions like Muthoot FinCorp.