Looking for a gold loan?

Have you asked yourself - What is the purpose of taking this loan?

For a new expense? or To pay off your credit card debt or another loan?

If you're seeking a gold loan to pay off existing debts or credit card debt, you run the danger of getting trapped in debt. Loan settlement may be a smarter alternative. Our specialists break down everything you need to know about gold loans, as well as how and why you should consider loan settlement if you are having financial problems.

What is a gold loan?

A gold loan is a type of loan that allows the consumer to borrow money using their gold jewelry as collateral. The purpose of getting a gold loan can vary depending on what the customer needs the money for. Some typical uses are home improvement, education fees, or even investment opportunities. Some customers use this option when they are facing financial difficulty and other options are not available.

What are some advantages of taking a gold loan?

Some advantages of taking out a gold loan are that most companies offer flexible repayment terms, instant cash in hand upon loan approval, and many companies are even able to provide free valuation on the collateral.

What are some disadvantages of taking out a gold loan?

The main disadvantage is if the customer cannot make their monthly payments, their collateral will be held until the loan is repaid. This means that if the customer cannot repay the loan, they may not get their gold back. Also, some companies have a minimum amount of jewelry required to redeem a loan and this amount varies between companies.

Who can avail gold loan?

Anyone who has gold jewelry that they are willing to use as collateral can avail of a gold loan. There may be some additional eligibility requirements including:

  • Minimum 18 years of age
  • Minimum 18 carats gold for collateral
  • Credit worthiness of the applicant

How much money is available through a gold loan?

The amount of money that the customer can borrow varies depending on several factors. Some factors include the market value of the collateral, company policies, and even the location where the borrower lives.

Gold prices, purity of the gold used to make the jewelry, and many other factors influence the loan amount that you will be given against the gold items pledged with the lender. Depending on the loan option taken by you, you may borrow up to Rs.1.5 crore with a repayment term of three months to four years.

How much does a gold loan cost?

The interest rates for a gold loan can vary depending on several factors including company policies as well as the type of collateral being used. Interest rates on gold loan usually range between 7% p.a. and 29% p.a. The following are some of the additional costs and charges that may be incurred on a gold loan – processing charge, late payment penalties/penalties for non-payment of interest, valuation expenses, etc.

What are some tips to consider before taking out a gold loan?

The first tip would be to look at different gold loan companies and compare their terms and policies. Some companies allow borrowers to repay their loans in installments rather than all at once which can help lower the cost of borrowing.

Another tip would be to make sure that you know how much your gold is worth and if the jewelry has any sentimental value such as family heirlooms or antiques, asking for a second opinion from a professional appraiser can help ensure that you receive accurate market value on their collateral.

What are the Documents Required?

The following documents are typically required from a borrower seeking a gold loan:

  • Duly-filled application form
  • Passport sized photographs
  • Identity proof
  • Address Proof
  • Signature Proof
  • Form 60 or PAN card
  • Proof of age
  • Post-loan disbursement documents, if any.

What will happen if I am unable to repay the loan amount?

If you don't pay off the loan on time, you will be levied some interest and penalty for the amount outstanding. If you do not repay the loan amount after numerous reminders, your jewelry may be sold to recoup the outstanding sum.

So a better alternative is to avoid taking gold loan if the purpose was to pay off some other loans (like credit card loan or personal loan), and instead explore loan settlement to come out of debt.

Is loan settlement right for you?

If you are thinking of taking a gold loan to pay off your credit card debt or some other unsecured loan, you may be better off settling this debt rather than taking more gold loan.

There are several benefits to paying off your debt through settlement. You'll be debt-free faster, as well as save money. Rather than defaulting on your loans, you can improve your credit score in the long term by paying them through settlement.

Third, rather than defaulting on your loans, you can improve your credit score in the long run by settling your debt. This is because a settled account is regarded as a "settled account" vs a "written-off" account, where the lender does not receive anything and therefore the impact on credit score is far greater.

How to settle your loans?

A lump sum settlement can be explored if you don't have the money to pay your entire debt in one payment. This solution may be advantageous for both sides since the lender receives a portion of the money he is owed, and you can get out of debt faster.

Another choice for settlement is monthly installments; it entails making smaller payments over a longer period of time. Although this option may be more cost-effective for the borrower, it is typically less advantageous to the lender.

Taking help from Loansettlement.com

If you're having difficulties deciding where to begin when it comes to debt relief, Loansettlement.com can help. We specialize in helping borrowers negotiate settlements with their creditors.

We can negotiate a settlement that works for you, regardless of your circumstances. You may be able to settle your debts as soon as 90-120 days after signing the contract, so apply now and start receiving debt relief RIGHT NOW!