India’s affection for gold is much more popular and known to everybody. Here, gold is preserved in the form of pieces of jewelry. India is one of the largest importers of gold worldwide. Indians are fond of gold-made ornaments, but they also prefer to buy gold as an investment for funding at emergency times and to fulfill urgent cash requirements. Gold can be your solution, whether it is a shortage of money, business expansion, or a medical emergency. Gold is deposited to get a loan against it.

The gold loan has many perks. But, it is important to convey the message to the loan taker to be aware of some mistakes when applying for it. Here is a list of some known mistakes people usually make at the time. If applying for an online gold loan, they must avoid these mistakes: 

1. Not checking the credibility of the lender

When you are about to take a loan, you are plighting your gold to the lender to get money based on the valuation of your gold. As you get a loan against your asset, your gold will be kept in the bank until you complete your repayment. So, you should go through the lender’s credit record and make a comparison with other lenders in the market. You can use specialized web programs to distinguish between the best and worst lender services based on standardized factors like annual interest rates and processing charges.

2. Not going for enough options:

Every lender has a different proposition from others. When you are on the way to taking a gold loan, it will be a rational decision for you to check out all options before making the final selection. Loan on gold offered by the lenders is attractive with a competitive edge. When you read the lender’s proposal, you should ensure that the printing is straightforward and pleasing. Your primary selection tool should be well-researched. You must speak to many lenders to know about their offerings based on the annual interest rates and LTV (Loan to Value Ratio) and then make a shortlisted choice of lender. After that, you will make your final decision about the best proposition according to your needs.

3. Not being aware of repayment method:

When getting a loan, every borrower should talk about the process with the creditor. Customers should understand the structure that helps them plan their financial investment for a better future and avoid difficulties getting a hassle-free service. There are four types of repayment processes in the market, they are: 

Regular EMIs: Repayment will be in EMIs, including the interest and principal amount.

Partial Repayment: Repayment can be made at the convenience of the borrowers.

Only Interest EMI: In this case, the borrower can pay the interest in EMIs and the principal amount in full on the maturity date.

Bullet Repayment: Borrowers are bound to repay the whole amount, including the interest and principal amount, at the end of the maturity. 

So, Investors should be aware of the pros and cons of these offerings before making a decision.

4. Not being aware of the quality and form of the gold that qualifies your loan:

Lenders grant loans when your gold exhibits a purity of 22 karats and more. If you are getting a loan against your piece of jewelry studded with gemstones, you should keep in mind that the value of gemstones will not be considered at the time of valuation of your gold. The weight and purity of goals are the only factors to decide your loan amount. Customers prefer gold ornaments for parallel transactions to acquire a gold loan, but gold bars, coins, or bullions are not accepted for a gold loan at all. You can have the gold loan against your gold coins, but the weight must not exceed 50 grams and should be 99.9% pure.  Besides these factors, borrowers should read the loan’s terms and rules properly. If you see that your lender will charge a prepayment penalty over your gold loan, you can negotiate with him or make an alternative.   

5. Not considering LTV calculation

 LTV stands for Loan-to-Value Ratio. This term is the mathematical expression between the ratio of loan and the net worth of your gold. This method helps to calculate the risk. If the LTV rate is high, the bet will be proportionally high. So, when getting the maximum amount from lenders, customers should consider the LTV ratio. If your gold values Rs. 4 lakhs, you will get 75% of it, i.e., Rs. 3 lakhs.

Gold loan is considered one of the best loans today. At the basic stage, it is easy to obtain. This helps you take financial liabilities for your family without enough trouble in processing. It takes less time to mature your required loan amount. The gold loan market has flourished and remained popular among people for this benefit. Gold loans facilitate the process with many utilities and benefits. So, you can select the online gold loan option as the best choice to fulfill your requirement. 

Gold Loan mortgage rate of interest calculator

• Fast calculation – A calculator is sure to carry out advanced calculations shortly. Equally, EMI calculations, rates of interest, and annual premium are parameters that the device supplies virtually immediately to its customers. You mustn’t contact your financial institution consultant each time whereas on the lookout for the installments you have to pay.
• Right outcomes – The device supplies correct rates of interest and different mortgage parameters. The values might range with totally different banks. Nevertheless, in a nutshell, it offers you a primary thought of the quantity you have to repay and the tenor of the mortgage. You may later confirm the outcomes along with your financial institution consultant.

Banks and monetary establishments providing gold loans will consider the gold’s web weight and purity. Relying on the standard of your gold, its market worth is set to finalize the mortgage quantity for disbursal. Bajaj Finserv gold mortgage rates of interest range between 75 to 80 p.c of the gold worth pledged. For particulars, you may go to the Bajaj Finserv website to take a look at the newest rates of interest.