Taking a loan is a well-known option in times of financial difficulty. At present, there are many options available like personal loan, gold loan. Due to the increase in gold prices and increasing demand, gold loan has become a good option. Through this, you get liquidity in a short time without selling precious gold. Keep some things in mind before taking a gold loan
It is important to consider many aspects before taking a gold loan. These include interest rates, loan-to-value ratio, processing fees and loan repayment terms. Above all, the safety of the gold pledged by you is most important. In such a situation, you should choose a reputed lender (i.e. a firm giving gold loan) who has a safe storage or locker facility or an insured vault. For how long can you take a loan?
Generally, you get 3 to 2 years to repay the loan. But it depends on the bank and NBFC. Like HDFC Bank gives loan for 3 months to two years. SBI gives it for up to three years. Muthoot and Manapuram give loans for a longer period. What is the maximum gold loan you can take?
The maximum loan you will get is Rs 90,000 on gold worth Rs 1 lakh. SBI gives gold loan up to Rs 50 lakh. They also give loans of Rs 1500. Since these companies give only gold loans, there is no maximum limit here. Are any documents required for gold loan?
According to SBI’s website, you will have to provide PAN card, Aadhaar and 2 passport size copies. Apart from this, proof of address will also have to be given. Is your credit score considered in this?
Gold loan is a type of secured loan. That is why your credit score does not matter in this. You get this loan easily and at a lower interest rate than a personal loan. How to repay the loan?
Banks or NBFCs give you many options to repay the loan amount and interest, you can choose any of these according to your need. You can pay in equated monthly installments (EMI). Apart from this, you can pay interest during the lump sum principal payment. This is called bullet repayment, and in this the bank charges interest on a monthly basis. What will happen to your gold if you do not repay the loan?
If you are unable to repay the loan on time, the loan giving company has the right to sell your gold. Apart from this, if the price of gold falls, the lender can also ask you to pledge additional gold. Taking a gold loan is right only if you need money for a short time. It would not be right not to use them for big expenses like buying a house.
