Gold articles are kept in a safe. This safe is always kept in the strong room. That’s why you can be sure that you will get your gold back as soon as you repay the loan.
If there is a sudden and quick need for a loan, then taking a gold loan by pledging your jewelery is an easy way. Lenders easily give loans up to 80 percent based on the current market rate of gold. People who have very low credit score can avail gold loan. This loan is also available very easily because there is very less paperwork in it.
This is a secured type of loan in which nothing other than gold is required as security. This is the reason why taking gold loan is slowly coming into vogue. However, many people still fear that the lender might steal their gold or replace it. It is important for such people to know that if they are taking a gold loan from a non-banking financial company, then the chances of its replacement or theft are negligible.
Gold will be safe
Gold articles are kept in a safe. This safe is always kept in the strong room. That’s why you can be sure that you will get your gold back as soon as you repay the loan. Not only this, the lender is also bound to return the gold after the loan is repaid.
There is also a common belief related to gold loan that the rate of interest on it is high. While the interest charged on gold loan remains less as compared to other secured loan option. Banks offering gold loans have reduced the interest rate to between 10 to 18 percent. Market experts always recommend market research and comparison before taking a gold loan. This can be helpful in getting a better deal.
Repayment Methods
Repayment in gold loan can also be done by different rules. Many lenders do not charge any fee on prepayment of gold loan. While some lenders may charge a processing fee of two to four percent on prepayment of the loan. This fee is applicable on the remaining principal amount. Therefore, it is always advisable to decide the terms and conditions at the time of processing the loan application itself.
Some people often miss the repayment due date after taking a loan. Although the gold jewelery is like a guarantee for any lender, even then they cannot seize it completely. Some lenders charge additional interest for being overdue. If the borrower is not able to repay the loan on time, then the lender can give him a notice to repay the loan up to a certain limit. If the loan is not repaid up to the specified limit, the lender can auction that gold for recovery.
