“Gold Loan In India“ is emerging as a popular way of getting quick funds. Indians traditionally hold yellow metal as a savings component. Now it is also increasingly being used as a funding component. A Gold Loan from ShubhBank is a loan given by against the security of your gold ornaments and jewelry. If you are looking for a Gold loan then these are the top mistakes one should avoid while applying a gold loan.
• Opting High Interest rate to get high LTV: Gold Loan quantum depends on per gram rate of gold prevalent in the market. Most of the lenders allows for LTV ratio of a maximum of 75%. Some lending companies provide highest LTV scheme at significantly higher interest rates, so beware. To avoid burden of interest in future, always choose the schemes which provide your higher quantum at lower interest rate.
• Evaluate the Interest Rate Calculation: The lending institutes often market their schemes to show optically low rates of interest and subject the borrowers to terms and conditions which might end up paying a significant higher interest. Therefore, always grab a deal which offer fixed or constant interest rates and do check how your interest will be actually calculated.
• Wrong Repayment Mode: The traditional lenders offer EMIs as a repayment method whereas NBFCs charge monthly interest. In case of missing your EMI or a failure to make this monthly payment might lead to higher interest rate called as jumping interest rates. Always choose a repayment method which suits your cash flow requirements. The gold loan from ShubhBank offers flexible repayment option where a borrower can pay at any time during the tenure of loan without any change in interest rates.
• Ignoring the Hidden Charges: Some lending institutions often hide a lot of charges in their loan application. These charges may include processing fee, foreclosure charges, penal charges on late payment, and auction related charges. Always count on additional charges in your calculation to know the full financial cost of your loan. These hidden charges can be burdensome in long run. “Apply For Gold Loan“ from ShubhBank which offers transparent loan processing with no hidden charges.
• Choosing the wrong tenure: Tenure means the time period in which you repay the loan. Tenure varies from few months to few years. Therefore, choose a tenure that suits you the best. Keep in mind that how interest calculation is linked with your tenure. If you are charged with jumping interest rate, you might be paying higher interest with long tenure. Hence, choose wisely as per your cash flow and repayment capability.
• Being unaware of Auction term: In case of any default, your gold will be up for auction. Your lender will be entitled to auction your assets in the market and recover the loan money. It is wise decision to discuss the auction terms clearly prior borrowing and check the penal charges associated with auction.
As a borrower, be aware of not committing such above mentioned mistakes while applying for a gold loan. Always take an informed decision as you are entitled to do so.