How To Compare Different Gold Loans In India
Planning to take a gold loan? Keep these important factors in mind when you compare between different gold loans.
Before taking a gold loan, you must compare all available options as they provide different services and offers. For example, one lender may provide 75% of the total gold value as the loan amount, while one may only offer 50%. Hence, you should consider the following parameters to compare gold loans from different financial institutions.
6 Parameters To Compare Gold Loans Provided By Different Financial Institutions:
Interest Rate:The interest rate on the gold loan will determine the amount you pay over the interest amount while repaying the loan. Once you know the loan amount you need, you can compare various financial institutions based on the interest they offer and choose the lowest one.
Loan Amount:Lenders offer the gold loan amount based on a set percentage of the total value of the gold. Once you know how much your gold is worth based on the domestic prices, you can compare financial institutions based on the percentage of the total value they offer as the gold loan amount.
Loan Tenure:This term determines the repayment period. It also determines how much EMI you will have to pay every month. It is important to compare lenders based on the offered loan tenure to ensure the EMIs are affordable.
Disbursal Speed:Gold loans fulfil short-term capital needs, and the amount is often needed urgently. Disbursal speed determines how much time a lender takes to credit the loan amount into the borrower’s bank account. You should choose a lender with the shortest disbursal speed.
MTM Charges:Lenders levy Mark to Market charges on borrowers for the services rendered to account for the “fair value” of the pledged gold as per the current market gold price. Some institutions charge a commission, while some charge a flat rate as low as Rs 500. You can compare institutions based on their MTM price model.
Documentation:Completing KYC by providing some documents is mandatory for taking a gold loan. However, you should compare financial institutions based on the loan process’s simplicity. The easier the process, the faster the gold loan will be disbursed.
ConclusionNumerous financial institutions offer gold loans in India. However, the success of the gold loan in fulfilling your capital needs without creating a financial burden depends entirely on the loan product. The gold loan product should be ideal, and the induced factors should be customized to benefit the borrower.
Q.1: Does a gold loan have any additional charges for the disbursal?
Ans: No, once the gold loan is approved, there are no additional charges for disbursal.
Q.2: What documents are needed to get a gold loan?
Ans: You must provide documents to prove your identity and address by submitting two government-issued documents such as Aadhaar Card, Pan Card, Driving License etc.