When many banks and institutions offer you gold loans, it becomes challenging to choose one of these from which you can get a gold loan by pledging your gold as collateral. However, obtaining a gold loan is pretty simple, allowing a person to get a gold loan quickly without much hassle and tension. So, how can a person obtain the best offer in gold loans? A person should first look, evaluate and then compare the many options he has, and after that, he can decide the best one amongst those options. Various factors need to be checked for comparison. Let us study a few of these factors:
The rate of interest is one factor that makes borrowers choose gold loans over other types of loans because gold loans require a low rate of interest which is quite flexible. The rate of interest under gold loans ranges between 7%-26% and can vary according to different banks and lenders with whom you apply for the gold loan. Banks and lenders used to offer up to75% of the total value of gold during that time in the market. But the RBI has increased this percentage up to 90% recently.
Every loan has a tenure that is the expiry date of that gold loan. Within that tenure, the borrower has to repay the principal amount along with the monthly instalments. However, since gold loans are short term loans, they can be repaid within a few months or one year. And one can check their monthly instalments through the gold loan EMI Calculator provided on every bank’s website to calculate their availability of funds for paying back the principal amount along with the monthly instalments within the stipulated time.
Processing fees are the charge paid by the borrower to the lender at the time of submission of loan application and when the bank approves the application; these are the fees that lenders charge for checking the application and documents involved in the loan process. These fees/charges depend on different banks and can vary from bank to bank. Processing fees are pretty flexible and transparent. Some banks and lenders might not charge any processing fees, whereas others might charge a processing fee as low as 1%-2%, while others might charge it in the form of a fixed percentage on the whole amount of the gold loan.
These are some of the factors to be dealt with and decided carefully while applying for a gold loan. Then, a person can compare various bank gold loans on these factors and choose the most suitable one. Another addition to gold loans, which makes it the borrower’s first choice, is that gold loans do not require a credit score, which means that a person who doesn't have a good credit score can also apply for a gold loan with any bank or lender and that is because gold loans are secured loans that require gold as collateral which makes it pretty simple. In addition to that, gold loans don’t even ask for income proofs, making the documentation process a little easier to deal with.
Many financial institutions provide gold loans, such as Axis Bank, Dena Bank, SBI bank, etc. One can compare each of their terms and conditions and then choose according to their convenience. And almost every bank has an online website which makes it possible for you to check the conditions. For example, you can calculate your monthly installments using the SBI Gold Loan Calculator. This will help you to decide whether you want a short tenure or a longer tenure, along with the rate of interest. They are easily available with a lot of convenient terms and conditions like flexible tenure, easy rates of interest, minimal processing charges, etc. which makes it easier for a person to plan and take the gold loan as per their comfort.
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