7 Points to Consider Before Taking a Gold Loan

Gold, an auspicious metal, is used for gifting to your close ones at weddings and other auspicious occasions associated with a fresh start. People also buy gold and save it to liquidate it at the time of a financial emergency. Most of us have the gold jewellery put away in lockers but keep fearing its theft. Did you know that you can use the gold to help you get urgent finances on a rainy day? Yes, the high-value metal can come to your rescue at times of need in the form of gold loans. 

Before taking a loan against gold from any lender, it is essential to know these points. Let’s check what they are:

The first critical point that one must consider before applying for a gold loan is the 

Budget-friendly Loan Schemes

A good loan will have multiple budget-friendly gold finance schemes that are customized to meet the diverse financial needs of customers from all walks of life. Apart from this, the loan schemes are kept transparent offering fixed interest rates. Since the loan is secured, the lender will not change the interest rates based on your profile and should offer a reasonable interest rate based on the scheme and the loan amount you decide to borrow. These interest rates and EMI can be calculated using a gold loan interest rate calculator before applying for the loan. Additionally, the loan schemes are designed to levy any foreclosure charges when you decide to repay the funds before tenure.

Lender’s Credibility

While offering a high-value asset that also holds a specific sentiment as collateral, it is necessary to ensure the safety of the pledged ornaments. Availing a loan from a lender who understands this value will help you be at peace. When you deal with a reputed financial institution, you get the best gold loan rates and be assured that the gold is taken care of. Reputed lenders do not compromise on security, and they keep your gold in specialized safe rooms with CCTV cameras monitored 24*7.   

Repayment Options

One needs to check the loan’s repayment structure to ensure timely repayments. Knowing the repayment options help plan the best one you are comfortable with based on the current finances. You can choose regular EMIs, bullet payments, or partial payments, depending on the scheme you choose. The standard repayment options are:

  • EMI – Regular monthly payments in equated installments.
  • Bullet Loans – The interest component is deducted as monthly repayments. However, you can pay the entire loan amount at the end of your tenure.
  • Partial payment – You can make partial payments of the loan when you desire within the tenure.

Eligibility Criteria

Gold loans have the simplest eligibility criteria. One does not have to worry about their credit score and profile, employment history, or income stability while availing of the loans. The basic KYC and collateral are enough to obtain these loans and be eligible for them, and thus the documentation involved for the loans is minimal. 

Loan Amount

The loan amount is an essential factor of a gold loan that you must consider. No lender will pay you 100% against the gold value. Finding a lender who offers a high loan-to-value ratio is important. Look for lenders that offer up to 1 crore or up to 75% of the gold value pledged, and this can help you get more loan amount at lesser gold secured. Additionally, opting for loans with top-up facilities can be more beneficial in case of quick cash requirements even after taking the loan.

Understand the Gold Quality

When pledging your gold ornaments, certain quality checks ensure that the pledged jewellery is pure. Ornaments 18-22 carat or above are only accepted for the loan. Checking the lender’s website to understand their criteria will save you time and hassle. Additionally, it is essential to choose a lender who cleans the gold with high-precision tools so that the gold is not lost in the process of cleaning.

Loan Processing Time

When looking for gold loan for an emergency, processing time plays a vital factor while choosing a loan against gold. Choosing a loan with a quicker processing time within 30 minutes helps you utilize the cash immediately when required.

Though gold loans are offered online and offline, choosing Muthoot FinCorp with a robust online and offline presence makes your gold loan payments and the entire loan journey even smoother and easier. With over 3600 branches across India, one can easily find a branch near your home to directly avail of the loan according to their convenience.

If you are skeptical about going to the branch to avail of the gold loans, you can also request doorstep gold loans at your convenience. Your gold will be inspected and valued at your doorstep, and the loan amount will be disbursed within hours.


TBN Editor

Time Business News Editor Team