Gold Loan Tips For Students & Professionals
Gold is considered one of the most preferred way to raise money at the time of emergency. Read to know more about the certain tips to be considered while availing a gold loan.
Gold is one of the most preferred investments in India. Possessing gold gives a sense of financial security. Therefore, gold plays a vital role in managing mounting expenses. In case of medical or financial emergencies, one can rely on gold. Furthermore, gold is a strong source of funding for mounting expenditures.
A gold loan may help to keep your head above water in tough times like paying admission fees or funding a small business. However, before applying for a gold loan, you must evaluate all the aspects of its functionality.
A gold loan is an amount borrowed from the lender by keeping gold as collateral based on the current market rate of the gold. As these are short-term loans, the repayment period varies from one month to a few years. If you are a student, professional, or business owner, here are some helpful tips that will help avail you of the benefits of a gold loan.Gold Loan Charges
Most financing facilities, including gold loans, have some fees. The borrowers must be aware of all the charges included in the process of availing gold loan. While the charges aren’t the same as that of traditional loans, you must compare such details of various banks and financial institutions providing gold loans. This can help evaluate the charges and give a glimpse to determine the monthly EMI.Repayment Options
Repayment comes with various options and flexibility.Regular EMI
This is the regular EMI option where your EMI comprises the principal and interest amount over the loan. The EMI is a predetermined sum set considering the interest amount and the tenure to be paid monthly by the borrower.Only Interest EMI
As the name recommends, the EMI comprises just the interest amount, while the principal amount will become due immediately at the end of the tenure.Partial Re-Payment
Here, the borrower isn't limited by any repayment schedule and pays as per convenience. This payment scheme is particularly valuable for business owners where there is a possibility of unsteady cash flow. Repaying the principal amount is profitable to decrease the interest costs.Bullet Re-Payment
The entire sum due, i.e., principal + interest, is reimbursed immediately at maturity. No amount is due during the entire loan tenure. The interest continues to accumulate in the principal sum until the end of the loan term. This repayment choice is lucrative, only for a shorter duration.Renewal Facility
Gold loans are the most accessible loans, making them easier for renewal. Most banks deal with renewal facilities where borrowers can re-avail the loan when needed. But, it is applicable only if you have repaid the earlier loan.Security
To safeguard the gold against any outside dangers, it is highly recommended to apply with a reputed financial institution.Gold loans have repeatedly proven to be a reliable source of money. In addition to the above benefits, availing gold loan is flexible. It comes with multiple repayment modes and a smooth application process, making it ideal for students and professionals in times of need.
FAQs:
Q.1: What are the minimum gold purity criteria to avail gold loan against gold?
Ans: The minimum purity of the gold should be 18 carats and above.
Q.2: What are the gold loan processing charges?
Ans: The loan processing charges are 1%-2% of the disbursal amount.
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