Important Factors for Opting Gold Loan
Important factors to consider while applying for a gold loan
Following are some crucial factors that intending borrowers should
keep in mind while applying for a gold loan.
·
LTV or loan amount
Being a secured loan, the gold loan amount depends on the LTV a lender
provides. Now that RBI increased the LTV cap on a gold loan to 90%, individuals
can avail a sizeable loan amount by pledging gold articles from their
possession. However, the lenders decide the LTV after assessing various factors
like the credit profile of borrowers, purity of gold, etc. Usually, you can avail
of the best gold loan by collaterising gold articles of 18K to 24K.
·
Gold security
Since gold is a high-value asset, borrowers are often skeptical
about its security after pledging. Therefore, it is vital to check the
credibility of a lender before leveraging this asset. However, top financiers
follow robust security protocols while storing the pledged gold.
·
Repayment options
Unlike other debts, gold loans offer various repayment options to
choose from. Borrowers can opt for a regular EMI facility, or they can repay
the interest periodically and principal at the tenor's end. Alternatively, they
can also choose to repay the interest upfront and principal later. They can
select a gold loan repayment as per financial capacity.
·
Additional charges
A loan against gold also accompanies several additional charges such as
processing fees, part-prepayment, and foreclosure charges. However, you do not
need to pay any hidden charges except processing fees with a reputed financier.
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