Loans Against Gold

A loan against gold is one of the fastest and easiest loans available. The loan is provided in exchange for the value of gold or jewellery that belongs to the borrower. The lender will assess the purity and price of your chosen gold / jewellery and will then decide how much they can lend to you. Loans against gold are useful for fast cash needs, including cash emergencies. They do carry the element of risk - because if you are unable to repay the loan within the terms of the loan, the lender may sell your gold / jewellery to recover the amount you owe them. Loans against gold are usually available even for people who do not have an ideal credit history. Read the terms and conditions of any lender carefully so that you understand your financial obligations regarding the loan.

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Compare Loans Against Gold

It is possible to borrow money against the value of gold jewellery.

What are loans against gold

Gold loans are generally compared with personal loans. The processing time for gold loans is very short compared to personal loans. Gold loans are fully backed by tangible assets, therefore the lender shouldn’t worry too much about the creditworthiness of the borrower as long as the lender is satisfied regarding the ownership of the gold. The rate of interest charged on gold loans is usually lower than personal loans. Gold loans typically are for the duration of one year and this can be extended at a later date depending on circumstances. During the loan period you must pay regular repayments on the loan.

Think carefully about loans against gold

If you want a gold loan, you can send your gold to the companies compared above. The lender will evaluate your jewellery and will provide the loan based on their valuation rather than the cost mentioned in your purchase receipt .Remember that the less you borrow the less you will have to pay back and your interest rate should be lowered. It is not possible to borrow against bullion i.e. gold bar and gold coins. This restriction ensures that default rate on gold loans is minimal as the buyer has a sentimental attachment with jewellery.

Gold loans are very straightforward to obtain

It is very easy to get a gold loan and you will receive the money quickly. Repayment can be structured with payment solely of the interest amount with principal being repaid at the end of the period in one lump sum. If you can wait for a day or two you should look at private sector and public sector banks which provide these loans at a more reasonable rates of interest. Also if you can restrict your loan amount to around 50% of the market value of the jewellery than the interest rates are most reasonable.

What are the risks associated with loans for gold?

Watch out for any fees associated with gold loans. Lenders will often charge a loan processing charge which is usually up to 1.5% of the loan amount and there is more often than not a valuation fee which can be up to Rs. 500. You must also ensure you are fully aware of the terms and conditions of the loan. If you are not able to make the repayments every month you could end up losing you gold to repay the outstanding balance of the loan. Before you borrow any money you should ensure you manage your budget and finances so you are able to make the repayments. If you are in any doubt you should seek independent financial advice.

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