Top 5 Advice to Buy Gold Loan in Bangalore

Indians’ obsession with the yellow metal dates back centuries. We consume tons of gold every year, making India one of the largest importers of gold in the world. Almost everyone buys gold at some point. Some people buy gold to portray their social status, some to give as gifts, and others simply buy gold to donate to temples. 

Gold is also a great investment option, as it stands steady in the face of inflation. Investors hold their money in gold other than the currency. Besides that, it is also used to secure instants funds to meet financial requirements. You can use your old to secure loans to cover the cost of education, wedding, travel, etc.   

Gold loan

A gold loan is a type of secured loan that requires you to pledge your gold jewellery as collateral to secure funds. With the gold price in Bangalore being at their best, you can secure a higher loan amount. Also, it serves multiple purposes, which means that you can use the sanctioned loan amount to cover the cost of a medical emergency, wedding, education, travel, or home loan down payment. 

Here are the top five advice to get a gold loan in Bangalore: 

  • loan amount

It is worth noting that the loan amount you are eligible for depends on the market value of your gold. The value of your gold is calculated based on the gold rate in Banglore. Most lenders clear up to 70% to 80% of your gold’s market value as a loan. Depending on your lender, you can get up to Rs. 30,00,00/- as a loan.  However, keep in mind that the higher your loan amount, the higher will be your interest rate.  

Lenders usually charge a higher interest rate on the higher loan amount to justify the risks involved. So, if you wish to secure a lower interest rate, it would be wise to opt for a loan amount based on your needs. Choose an amount that you can afford to repay with the interest rate on time. 

  • Interest rates

As mentioned earlier, a gold loan interest rate comes with affordable interest rates compared to other loans in the market. Your interest rate is determined based on factors such as age, income, loan amount, credit score, and current financial obligations.  The gold loan interest rate ranges between 10% to 15%, depending on your lender.  To obtain the best interest rate, you will have to convince your lender that you are a trustworthy borrower and can repay the loan on time and without any default. 

  • Loan tenure 

Your repayment tenure is another factor affecting your loan amount and interest rate. Your lender may allow you to repay your loan within six months to three years. Although you have the option to choose a longer loan tenure, it does not mean that you should. Your lender will charge a higher interest for choosing a longer loan tenure. So, if you have a surplus amount in your bank account, it is advisable to choose a shorter loan tenure. Your EMI amount may increase, but you will save on interest. 

  • Processing fees

Interest rate is not the only cost associated with a gold loan. You will have to incur a processing fee to avail of a loan to meet your financial requirements. It generally ranges between 1% to 2% of the total loan amount. So, before applying for a gold loan, it is imperative to compare different lenders and their offers. Make sure to choose a lender that offers the lowest processing fees. This way, you can significantly reduce the total cost of borrowing. 

  • Lender’s credibility 

Before applying for a gold loan, you must check your lender’s credibility and find a lender that has been in the loan business for a long time and has a reputation in the market. This way, you know you are getting the best deal based on the gold rate in Bangalore. 

You can check your lender’s credibility by going through the online reviews and customer testimonials, which offer great insight into their reputation. Finding a credible lender does not only help to get the best rates and repayment options but ensures that your gold jewellery is safe with the lender. 

Conclusion 

Given the gold price in Bangalore and the gold rate in Banglore currently holding high value in the market, it may be the right to pledge your gold items as collateral to secure funds for your financial requirements. You can get up to 80% of your gold’s market value as a loan.  Also, there is minimum documentation and eligibility requirement to obtain a gold loan.

Nishisingh

Nishi Singh is a professional journalist and editor in New Delhi. She has studied Mass Communication from National Institute of Mass Communication.