Gold loan is one of the easiest and best loan options available at any financial institution. Gold loans help you in getting instant, hassle-free financial assistance. Gold is still considered one of the most trusted commodities in any Indian household, and people depend on it during times of need.
It is a secured loan that helps you get instant cash in exchange for keeping your gold items as collateral. Let’s talk about the common mistakes that you should avoid when applying for a gold loan:
- Not checking the credibility of the lender:
Gold loans will give you cash according to the jewelry items you keep as collateral. It is vital to check the lender’s credibility before putting your assets at risk. The jewelry you keep as collateral stays with the lender until you pay the loan completely, so it is essential to check the lender’s background before relying on them. By verifying the lender, you can avoid scams and secure your assets.
- Not looking for all the options:
Multiple financial institutions offer gold loans to their customers. People often skip looking for all the options and go with the first one. It is essential to compare all the options before selecting the suitable one. You can review the perks and compare the offers to get the best interest rate and plan on your loan.
- Ignoring the rate of interest:
Banks offer gold loans based on the interest rate during the selected tenure. People who do not know enough about the policy tend to start taking the loan without talking about the interest rate. The lack of information about the interest rate can burden the financials in the long run. It is advised to choose a loan plan with a reasonable interest rate to avoid any issues later on. You can check the gold loan interest rate with the help of the calculator.
- Pledging any gold jewelry for loan:
The weight and kind of gold matter to the lender. They will check the carat value before taking the item as collateral. If you want to check the value that you will be provided for a certain item, then you can use the gold loan calculator. You can also read the criteria for the loan or visit the branch to discuss it before giving the jewelry items as collateral.
- Not knowing other EMI plans:
There are multiple ways to repay the gold loan, which can help you in reducing your financial burden. So make sure to look for all the EMI plans before choosing the right one for you. A lot of people don’t know about EMI plans before applying for a loan, but it is advised to check with the lender or search online before opting for the plan.
Conclusion:
Make sure to avoid these mistakes while you are applying for the gold loan, as it will help in reducing your burden and in choosing the right plan. You can make a decision after doing extensive research and knowing all the details about the gold loan.
