All That You Need To Know About Choosing Online Gold Loan
Gold is among the most popular asset classes in India. Its popularity can be gauged by the fact that India imported gold worth $ 8 billion during the first quarter of 2019. Most owners of gold follow a general tradition of directly putting their gold directly into their bank lockers. Keeping something as valuable as gold idle in the bank lockers may not be the best utilisation of the yellow metal. Instead, they can be of great use if they are pledged for issuance of online gold loan. Gold loans are often for short term household requirements. Gold loans are cheaper and can be availed of in minutes. Muthoot Fincorp gold loan online is an excellent place to check for the best possible loan offerings.
Educate Yourself about Important Terms
Whenever one is applying for a loan or looking to purchase something, it is advisable to conduct thorough research. Similarly, when applying for a gold loan, it’s good to educate yourself about essential terms like LTV, Per Gram Rate etc. Knowledge of these gives you an upper hand when discussing terms with the representatives of various lenders. LTV or Loan to Value ratio is the underlying basis on which the amount of money lent to you would be decided on the date of application for the loan. The Reserve Bank of India has set the standard maximum LTV availed on gold at 75%. Thus it means that considering the value of your gold and the per gram rate; you could avail a loan of up to 75% of the value of your gold.
Value Your Gold
One of the most important aspects to keep in mind when applying for an online gold loan is to know the value of the gold yourself. If you know the worth of your gold, then you can quote an approximate worth of your gold beforehand of the application for the online gold loan. There are two ways to do this. If you know the Karat of all the gold that you own, you can get an electronic weighing machine and evaluate the worth of all the gold you possess. Otherwise, you can use the services of a credible valuation expert to help out.
How to Calculate Gold Loan
Now the question arises how to calculate the gold loan? So to calculate the loan rate per gram, the net weight of the gold in grams is multiplied with the standard per gram rate in the market and the purity factor of the gold. Net weight of gold is given by calculating the difference in weight of the gold used to that of the other elements involved in the ornament. So after the calculation of the net weight, we can arrive at a formula which goes as:
Amount of Gold Loan that can be availed = Net Weight of gold x Per Gram Rate x Purity of gold
After you have the gold amount calculated, the in-hand value loaned would be decided after the implication of LTV (Loan to Value Ratio) to the gold amount calculated. After the application of LTV, it would finally provide you with the Net Gold Amount.
How to Finalise a Lender
Performing all the above-stated steps, you would have all the viable options with you by now. So now to arrive at the best solution you should start by exploring all the aggregators and their offerings. Try and find the best-suited options which provide with proper control over the repayment of the loan amount without any additional pressure. You can try taking in some reviews about the lenders either online or offline. Evaluate the interest rate quoted by the lenders and check for any prepayment penalty or other such hideous charges which might later increase the final cost levied on yourself. Discuss with the people in your network with all these details and then select the lender with proper credentials and best offerings. Muthoot Fincorp gold loan is one of the most trusted options in the gold loan sector.
Gold loans are secured loans with minimal documentation involved and also no need for a credit score for loan approval. All this makes the approval time engaged in getting an online gold loan to a mere few minutes. It can be availed at negligible processing and foreclosure charges with a hassle-free extension of the repayment period. Benefits galore this makes it a much familiar and trusted way of securing loans.