Where can you get cheaper gold loan?
The best part is that the interest rates on gold loans are much lower than the personal loan interest rates. At present, many banks charge less than 9 percent interest on gold loans.
In the era of expensive loans, taking a loan against the gold kept at your home can be a good option. The process of taking loan against gold is really easy and you can get instant loan against it. Gold loans are for short tenures ranging from one to three years. Your CIBIL credit score does not matter in this loan like other bank loans. All you need is gold. The best part is that the interest rates on gold loans are much lower than the personal loan interest rates. At present, many banks charge less than 9% interest on gold loans. At the same time, the interest rates of personal loans in the market have crossed 20%. Let us tell you which banks have less than 9 percent interest on gold loans.
Gold loan interest rates
You will have to pay less than 9℅ interest on taking a gold loan from Central Bank, Union Bank, UCO Bank, Punjab and Sindh Bank and Indian Overseas Bank. The interest rates of banks on loans up to 5 lakh for 2 years are as follows:
Central Bank: 8.45℅
Union Bank: 8.65%
UCO Bank: 8.80%
Punjab and Sind Bank: 8.85%
Indian Overseas Bank: 8.95%
Things to keep in mind while taking a loan?
Loan to Value Ratio: This ratio shows how much loan you can get against the pledged gold. Banks and finance companies easily give loans up to 75% of the cost of gold you deposit.
Processing Fee: Many banks charge processing fee from you while furnishing a loan. The processing fee of many banks ranges from Rs 500 to Rs 25,000.
From where to take gold loan?
Along with banks, many big non-banking financial companies (NBFCs) also give gold loans. In this situation, there can be a dilemma about where to take a gold loan? In this regard, personal finance expert Jitendra Solanki says that it does not matter where you obtain your good loan from, a bank or an NBFC. While taking a loan, do consider where the loan is available at a cheaper rate and on easy terms. Are you getting the facility of paying the interest and principal amount of the loan? Although the bank and NBFC rules regarding gold loan are almost the same but there is a huge difference in their interest rates. However, the process of obtaining gold loan from banks is more complicated when compared to NBFC.
Pay interest on time
If you are taking a gold loan, its interest will have to be paid every month. Financial institutions levy heavy penalty for non-payment of interest on time. This is quite exorbitant. If the interest is not paid for a fixed period, the lender can auction your gold and recover the dues. However, before this, financial institutions warn you by issuing notices. Therefore, to breathe easy, keep paying the gold loan interest on time. When you have optimum money to entirely pay the principal amount, avail the opportunity and take back the mortgaged gold.