Blog #Gold Loan Interest Rate Calculator

As much as one would like, there aren’t enough warning signs and cautionary symbols before emergencies, especially during medicinal ones. And loss or insufficient funds then is an added downturn which is why gold loans are granted immediately by the financiers.

Banks and Non-Banking Financial Companies(NBFCs) provide commercial services on a day-to-day basis for millions of customers. And loan lending is a humongous part of their service. These loans are typically classified as secured and unsecured. For example, a gold loan is secured and needs collateral(asset) pledging to avail it. The required collateral is physical gold that can be of any form. Chains, necklaces, bangles, earrings, coins, bars are accepted as collateral. The loan is granted for a certain period, known as the loan term or tenure. Till the sanctioned loan amount is paid with the owed interest, the bank or the financial institution doesn’t return the pledged collateral.

Besides, based on its security, a loan can be classified according to its usage. They are typically categorized as generic and specific-purpose loans. A specific purpose loan means the loan amount is usually availed for that purpose alone, whereas a generic loan can be used for any reason. Specific purpose loans include car loans, home loans, business loans, marriage loans, etc.

The customers usually take out the loan for a car, home, or business-related financial requirements in these loans. However, in generic loans, the loan amount can be used for any purpose, including medical emergencies. Personal loans and gold loans are some of these loans. Some gold loans provide loan up to Rs 1 crore with an LTV ratio of 90%. It can be availed using the online or offline mode and is convenient either way. By searching for a Manappuram Gold Loan Near Me, you can take out a gold loan from the nearest Manappuram Bank.

Advantages of a Gold loan

The processing of a gold loan is straightforward and convenient and unlike a medical loan or a personal loan that can also be used for medical emergencies. Gold loans are much more effective as they only require basic documents. An applicant of legal age with government authorized ID proof can avail a gold loan in a few hours without hassle. In contrast, unsecured loans like personal loans and medical loans have long lists of documentation requirements that must be validated before signing off on loans. Also, the three-digit score representing the applicant’s repayment capability is required in a gold loan. So, even with a low credit score, you can avail the loan rapidly. And income proof is not needed to avail a gold loan. These benefits make applying and approving a gold loan simple and innocuous.

Features of a Gold loan

The loan amount of a gold loan is evaluated based on the value of the collateral pledged. The gold’s value is determined by considering the purity, and the weight of the gold pledged. More the purity and the weight, the higher the loan amount. The purity of the gold must be in the range of 18 carats and 24 carats. The weight of the gold loan should be at least 10gm to avail a loan from a few banks and NBFCs. However, most authorized lenders accept gold article(s) of any weight. Additionally, banks and NBFCs also take the rate of gold on that day into consideration before deciding on its value.

The loan to value ratio of a gold loan is a maximum of 90% and is granted up to Rs 1crore in most financial institutions and banks. The interest rate of the gold loan starts from 7% per annum with a tenure minimum and a maximum tenure of 3 months and 36 months, respectively. The Gold Loan Interest Rate Calculator is available on the banks’ and NBFCs’ official websites for customers to calculate the interest rate and amount based on the required loan amount and tenure. The processing fee is charged for the processing and approval of the gold loan and is NIL in most banks and NBFCs. The prepayment charge is incurred if the borrower closes the loan account before the end of the tenure. The fee, like the processing fee, is NIL by most financiers.


Also read:- Why Gold Loans From NBFCs Are More Favored In Covid 

Here are a few reasons it can be used for:-

Uses-

1) Medical bills: Gold loans can help you when you find yourself stuck in numerous medical bills. Medical bills can be as high as the sky. First, try to bring the amount of bills down and talk to the hospital about it. Try asking for instalments as no interest. If nothing works out, go for a gold loan and get your amount within an hour.

2) Student debt: firstly check if the interest rate of your student loan is higher or lower than the Gold loan you are applying for. If the interest rate on the gold loan is lower,than you can pay off your student loan with a Gold loan

3) Repaying friends or family: If you have to repay someone who extended a helping hand when you needed it the most but now you are unable to pay them back, and you are tired of asking friends and family again and again, a Gold loan might be the perfect solution for you. The better option is obviously to talk to them and make them understand your situation. If you still want to pay it back now and want no further wastage of time, go for a Gold Loan. But remember, you'd end up paying extra in this case.

4) Vehicle financing: Try for an auto loan first. If it costs you more, go for a Gold loan. But remember since gold loans are short term loans, you'd have to pay them back in one year in most cases. Use Gold Loan Interest Rate Calculator for accurate and fast computations relating to gold loans.

5) Vacation: people usually take personal loans to finance their travelling, mostly because it doesn't have any bar to its usage and its long term loan. It gives you the time to repay in lower EMI's but their interest is quite high. If you have enough Gold, that by pledging it you would be able to finance your vacation, go for it.

6) Essential home repairs: Obtaining a Gold Loan to fix something essential in your home is logical and sensible.
When you actually need it, go for it. Don't confuse needs with desire. Loan must be taken Only when it's necessary. Also, check to see if repair costs can be covered by borrowing a few funds from the family or relatives.

7) Expensive consumer goods: Computers, kitchen appliances such as fancy refrigerators, furniture etc can be very costly if you actually are a person who wants everything as soon as it is launched. You can buy absolutely anything you want but first, ask yourself, is the thing really that important that I want to finance it with a loan. Can I wait to purchase it?

8) Funeral costs: getting a gold loan for your loved ones last rites is A golden gesture but first see if you can do it with the help of borrowed funds from friends and family.

9) Pets: animal care is no less than human care. The veterinary expenses can be as high as your own medical bills. Sometimes it can get really high if your pet has some serious health problems.  

10) A small business: Gold loans are widely used by small business owners to finance their working capital requirements or to but the inventory. During covid times, it is one of the most availed loan products and was greatly used by small businesses across the country to start, restart or grow their businesses.

However it's essential to check the various costs associated with gold loans before availing one such as processing fees, interest rates etc. Check Muthoot Finance Gold Loan Interest Rate and others here. Any form of loan must only be availed when there is a dire need or no other option for financing.

Read More:- The Document Verification Process In Gold Loan