Possessing gold asset was once considered as an essential yardstick for estimating the financial status of a person. Even to this date, gold is viewed as an asset that can help you overcome your sudden financial crisis.
This has encouraged the country’s esteemed financial institutions to offer cash for gold to the gold loan applicants.
If you have a gold asset and want to make optimum use of it to get through your financial crisis, here are some tips. Watch out!
1. Type of gold that fetches money
If you wish to sell off your gold possession for cash, you might not need to make any calculations. But things become different when you avail a gold loan.
The first thing is that you have to know whether your gold asset can help you resolve your emergency financial need. For this, know what sort of gold you can offer to your lending institution under the gold financing scheme.
Generally, banks do not take gold bars, gold biscuits, gold coins, or gold bullions as assets for providing gold finance. Other than that, every form of gold ornament is considered by the bank.
But there are other financing institutions too that consider gold coins and bars as assets.
Therefore, it is always better to have clear talks with your selected financing organization about the types of golds that they would consider as an asset.
2. Safety of gold loan
If you are planning to apply for a gold loan for the first time, you might be skeptical. You might be in doubt whether you will be able to retrieve your priced possession or not.
Let us be frank on this; you might fall into an unprecedented situation and have trouble retrieving your gold asset if you choose any unlicensed bank or other financing institution.
However, you can remain assured that nothing of that sort will happen if you opt for a licenced bank or any NBFC approved financing institution for getting a loan against your gold asset.
3. Get information about the gold rate
When you want to make the most out of the deal, be aware of the days when gold rates are high. These are the days when your chances of availing some relaxations on the loaned amount’s interest get reduced.
For your further information, the financing organizations usually consider the prevailing gold prices for a particular day or last two to three weeks to calculate the loan amount that they will offer against any gold asset.
So, never forget to check the gold rate today in Mumbai, Kolkata or any other place you live before approaching any gold loan financial institution.
4. Check the Interest rates
As the gold loan’s interest rate is always lower, it is considered a superior option to overcome personal loans’ financial crunch.
But as a customer, you must be simultaneously aware that different financing organizations levy different interest rates against the gold assets. The rates can vary between 9% to 20%, based on your approach’s lending institution.
Hence, you have to collect precise information on the interest rate that your financial institution will charge for the gold asset that you want to offer for availing gold finance.
This way, you can estimate if you can repay both the capital amount and the interest charged against your loaned amount within the specified time.
5. Know the tenure
Your gold asset can only be of the best value as a gold loan if you repay the outstanding loan amount in time. If you fail, the disciplinary charges will be much higher than your expectations. Eventually, you will end up concluding that a gold loan is not at all a helpful option.
Thus, when you opt for cash for gold, you have to be simultaneously aware of the tenure by when your financing institution wants you to repay the amount.
If you follow the deadline meticulously, the gold financing option will always appear helpful to you.
6. Keep practical expectations
When we advise you not to expect too much in gold financing, do not misinterpret it as discouragement.
We want to mean that you can never expect that a financing organization will give you 100% of your gold asset value as cash for gold.
In general, 60% to 65% of gold’s actual value is offered as the loan amount. This is also subjective to the financing institution you approach. So, you have to be practical to feel optimally satisfied with the gold loan.