Choosing the best loan from various types of loans can be a challenging task to be accomplished.
You need to find a reliable loan that helps you stave off your difficulties during extreme situations.
The past few years have witnessed a significant increase in loan requirements among the general population. But what exactly do you need to know about loans?
We can find gold in every home in India, and we are also slightly emotional towards that, it is a friend in distress but we do not realize that many times we take personal loans which cause lots of debt on our credit cards. In this article, you’ll know about gold loans and what gold loan interest rates are, and why they are a better option for the short term.
A gold loan is a secured loan taken by pledging their gold articles as collateral. It does not involve any laborious documentation. The loan amount is a certain percentage of the price of gold (up to 80%) based on the current market value and quality of gold.
In simple words, the borrower pledges their gold assets, and lenders grant them a loan according to the percentage of the asset’s value, what’s called a secured loan. After availing of a loan, the borrower pays monthly installments until they pay off the loan. Also, gold loan interest rates are lower because it is a secured loan.
1. The security stipulated is available at almost every Indian home.
2. The procedure is simple, and it is easy to avail gold loan
3. Does not involve laborious documentation
4. We can take a gold loan for any purpose, and it comes with no verification of income, credit score, etc.
5. Gold loans give a shorter repayment range from three years to 7 days.
6. They include a processing fee to pay before you get your money.
How is a gold loan a good deal to take?
1. The interest rate on personal loans is between 9%-24% but as it is an unsecured loan lender can check your credit history and capacity for repaying the loan. On the other hand, gold loan interest rates are between 7.5% to 29%, and it is a secured loan in which you lend your gold.
2. The chance of getting a loan at good interest rates depends upon your credit history, income, employer, current loans, etc. A gold loan is a secured loan. Therefore, the credit profile of the borrower doesn’t matter. Therefore, gold loan rates per gram are lower than other loans. Taking gold loans from the rupeek.com platforms also have several benefits and saving on the interest rate.
3. The process and assessment of a personal loan are lengthy, but its documentation is simple. Whereas availing a gold loan is much easier with simple documentation.
Things to keep in mind before taking a gold loan
1. INFLATION– It is nothing but decline in the power of currency due to an increase in demand. Because of this, people invest more in gold. Gold is a hedging tool. I.E., gold rates increase when the interest rate goes down. Therefore, this could be the best time to invest in gold because you may get lower interest rates from the bank.
2. MARKET PRICE – Price of gold in the market is related to a lower interest rate. If the price of gold increases in the market, which means the price of ornaments or coins will also be high. Therefore, the risk associated with such cases is low and lenders can easily recover the amount by selling or auctioning the gold.
3. RELATION WITH BANK– Banks are partial with the new and existing customers or borrowers in lending loans. Therefore, if you are an existing customer, you are in a better position to negotiate a lower interest rate.
But how can a borrower know about the everyday changes in the rate of gold?
Gold rates are fickle. They change every day depending on their price globally. Therefore, the rate of 1gm gold will not remain the same. Therefore, before applying for a gold loan, ensure the purity of ornaments and their weight. For example, you have an ornament that you want to use as collateral to avail a loan if your pledged item has 5gm of 20k purity gold, which is priced at Rs 2000 per gram, you can avail up to Rs10000 against it.
Gold is the most preferable avenue of investment. Gold loans are reliable in using your jewelry lying inside your locker. But before availing them, do market research for the gold loan interest rates, processing fees, etc.
Someone can reclaim it once the pledged item amount is repaid. Until then, they will remain with your lender.
Rupeek provides gold loans with minimal processing and lowers interest rates. There are several reasons behind its increasing demand for gold loans among the people. Firstly, it provides the best gold grams rate in the market, insurance cover, minimal documentation, relaxed eligibility, and more that meet your requirements. Rupeek aims at customer satisfaction first and then their needs and demands. The customer can even raise complaints from the rupeek app while having any issue with its service.
