Important things to keep in mind before getting a gold loan
Are you planning to go for a gold loan? Have you been consistently checking things like the 18k gold price today in Allahabad or Ahmedabad and feel that it’s the right price? If yes, then it’s a need of the hour that you should plan things right. You should note that gold loans are not ideal for those who are looking for long-term financial support because they may have to wait longer than usual before receiving their money back from the bank.
There are some important things to keep in mind before going for any gold loan or else it can cause serious problems to you.
- Only borrow from a trustworthy NBFC or a bank
Unscrupulous moneylenders are quite common in India, especially in rural areas. They prey on the unsuspecting and often offer gold loans that are more than what the borrower can afford. Before taking out a gold loan, it is important to check whether the lender is reliable and trustworthy.
- Interest rate comparison
The interest rate offered by lenders varies significantly across banks and NBFCs. While some offer lower interest rates than others, it is important to understand how much you will have to pay for your gold loan before signing up with any lender or bank. It is also critical to compare interest rates with other types of loans as well as credit cards issued by banks or NBFCs so that you can save money on interest and reduce overall borrowing cost over time.
- Valuation of gold
It is important to know the value of gold before taking out a gold loan as this will determine how much you will be able to borrow from lenders and lenders’ margins may vary significantly depending on the market price of gold at that time.
The best way to get an idea of the current value of gold is through an online website that offers free market data on gold prices and other precious metals like silver, platinum, palladium and even diamonds. Checking the current gold price is easy all you need to do is go online and check gold rate today for bilaspur or for other places.
- Repayment Options
There are different repayment options available for the gold loan. You can choose a fixed monthly payment or pay it in instalments. It is also possible to make advance payments and then settle your loan with the lender at a later date at your convenience.
- Repayment Schedule
The repayment schedule of a gold loan depends on the amount being borrowed and the tenure of the loan. The term duration of gold loans varies from 3 months to 24 months, depending upon the purpose for which you want to use this precious metal as collateral for a bank loan.
You can choose between weekly or monthly repayments; both have their advantages and disadvantages. Weekly repayments are more convenient because they allow you to pay off your debt faster, but they also require more discipline from borrowers as they have to remember to pay their weekly instalments every week. On the other hand, monthly repayments are more convenient because they allow borrowers to spread out their payments over several months, but they also require more discipline from borrowers who have to pay back their debts on time every month.
If you fail to make payments on time under an unsecured gold loan agreement, then your lender has the right to pursue legal action against you in order to recover all outstanding amounts plus legal costs. If this happens then it is important that you contact your lender immediately so that they can work together with you to resolve any issues that may arise during this process, including how to pay off the extra interest or penalty.