Things to know before you take a gold loan in the current scenario
While most lenders only offer one-year gold loans, some banks allow borrowers to extend the term.Non-banking financial firms charge the highest interest rates on gold loans of any lender.In recent months, lenders have seen an increase in demand for gold loans.Goal loans were used by many small companies to handle their cash flow.Federal Bank gold loans increased 67 percent year over year in the December quarter, as an indication of the industry trend.
Keep a few things in mind if you’re considering gold loans right now.In recent months, gold loan rates have corrected.As a result, some lenders have extended the repayment terms and are encouraging borrowers to pay monthly or more frequently.Muthoot Finance, for example.For instance, a rebate for monthly interest payments is being offered.Most lenders typically offer gold loans with a one-year repayment period.
According to data from Paisabazaar.com, only a few banks, such as Kotak Mahindra Bank and Bandhan Bank, provide gold loans for three years or longer.Some lenders, on the other hand, encourage borrowers to extend their credit.the period of time The length of the loan is also determined by the form of loan and repayment option selected by the borrower.
Public sector banks, like many other types of loans, offer the lowest interest rates, followed by private banks.Non-banking finance firms have the highest interest rates of any kind of lender.Gold ornaments with a carat weight of 18 to 22 carats are generally accepted by lenders.Many lenders would accept bank-minted coins as collateral.
Accept up to 50 grammes of coins with a purity of 24 carats.In a gold loan, there could be several charges.Aside from processing fees, there are stamping fees, appraisal fees, and foreclosure fees, among other things.If gold prices fall, as they have in recent months, lenders can request more collateral.Lenders will charge a penalty and even sell the gold if the borrower does not repay or give more gold after many reminders.