Financial emergencies are inevitable in our life. Such emergencies call for immediate solutions that not only address our needs but are also easily accessible. Among the several credit tools available, gold loan stands as an attractive option. If you are a newbie to borrowing, the process involved to evaluate lenders can be harrowing. Here is comprehensive coverage that will assist you in understanding and narrowing down the right lender for your gold loan needs.
A glance at gold loans
Unlike the other loans such as personal loans, which are unsecured and involve exorbitant interest rates; the gold loans are secure with affordable interest rates. A loan against gold applicant should submit their gold ornaments as collateral to procure loans. This procedure decreases the ambiguity of loan the loan for lenders and hence assists them in providing credit at better and workable interest rates. The loan against gold is sanctioned based on the weight and purity of gold. Lenders such as Muthoot Fincorp also provide express gold facilities and online gold loan facilities, which further eases the procedures involved in procuring the loan.
What are the procedures an Applicant should follow before selecting a lender?
1. Quick processing of the loan
As multiple lenders are offering gold loans, it becomes a real hurdle for an applicant to choose a lender that can process the loan quickly. Look for a lending institution that can process your loan within minutes.
2. Documentation required
The necessity of lengthy documentation procedures can pose hurdles, especially when an applicant looks for tools to assist their financial emergencies. Thus before signing up with any lender, you must understand their regulations and the documentation procedures involved. Research for lenders who offer gold loans with minimal documentation requirements.
3. The flexibility involved in repayment
Financial crunches often call for solutions that are quick and flexible. Since as an applicant, you often avail gold loans at times of emergencies, it becomes necessary that the lender provides schemes that are concurrent and flexible with your needs. Lenders such as Muthoot Fincorp offers two programmes of repayment that harmonises with an applicant’s needs.
- Bullet: The bullet mode of repayment provides the applicant with the freedom to repay any amount during the loan tenure. The applicant can either pay the entire principal amount during the loan tenure or pay in small instalments.
- EMI schemes: The EMI scheme is a more structured scheme of repayment with longer tenures for repayment.
4. Additional charges involved
While applying for a gold loan, the lender has some additional charges. These charges include processing fee, documentation fee, and overdue charges. There is a general mentality of skimming through this part of the loan policy. However, before collaborating with your chosen lender, understand these additional charges involved.
5. The security the lender offers to your collateral
Choosing a viable lender is undoubtedly a challenge, but it involves an impressive deal of scrutiny before narrowing it down to the best choice. As applicants receive a loan against the gold submitted as collateral, it becomes pivotal to learn about the authenticity of the lender and the security offered to the guarantee provided. Some lenders provide high protection to the collateral through the provision of secure storage lockers. Besides the world-class surveillance, look for a lender who provides the lender with insurance on their guarantee with easy top-up facilities on their gold loans.
6. Customer responses
A lender with a fair share of satisfied customers is trustworthy. Before applying for a loan with any lender, the applicant must research through:
- The client testimonials
- The responses made by the lender to address client queries
Conclusion
Gold loans are the easiest and the most popular among borrowers looking out for immediate solutions to their financial needs. Besides the ease of approval, flexibility, interest rates, and minimal documentation advantages make it a borrower-friendly credit option.
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