India is the country in the world that is the largest consumer of gold. According to some reports, the demand for gold in India has increased from 1987 to 2020 by 900%, and the demand for gold in spite of rising prices not going to die soon. This yellow precious metal is getting used for a long time for industrial, commercial, and investment purposes. And also from ancient times, it is getting used for loan purposes. But from the past few years, it got an official shape in the name of gold loans. Many NBFCs like Muthoot Finance Gold Loan, SBI Gold Loans, etc. offering gold loans. And demand gold loans getting increased in the Indian market. Also, gold loans are the fastest and easiest ways to avail of instant funds in emergency situations. The gold loan does not care about your credit score if you are having ample idle gold in your locker to pledge. In the case of an emergency, your idle gold can become your instant monetary solution. So there are ample reasons to apply for a gold loan.
But here are some reasons because of which a person gets afraid to apply for a Gold loan:
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Type of creditors: Gold is the commodity that a person buys from their life long savings. So it can be a very difficult decision in a person’s life to pledge their gold to just any creditor to get the loan. So to get a fear-free gold loan. It is compulsory to apply at the trusted NBFCs only. There are many trusted NBFCs like Muthoot Finance Gold Loans, SBI Gold Loans, ICICI Gold Loans, etc. are available in the market to apply for a gold loan at a secured place.
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A proper comparison of available options: To get the best deals on gold loans it is very important to compare the gold loan offers by different NBFCs on a different basis.
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Not able to understand the repayment structure: The repayment structure of gold loans can be easiest and most difficult as well. It all depends on the ability to understand. Gold loans usually offer the reducing balance method to repay the loan amount. Which is a very beneficial method for the borrower but can be complex to understand.
Avoiding LTV calculation: LTV means Loan-to-value calculation. This term is used by the creditors to tell the particular value of the loan that a person can avail Against their gold. Earlier could avail 75% of their gold loan value. Now it has increased by RBI to 90%. So it is necessary to be aware of different gold loan policies. So there are many safety measures to adapt before availing of the best gold loan offer.
