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For years, people have preferred a goal loan to get instant funds for setting up a business, children’s wedding, etc. It is because a gold loan is easy and readily available. With minimal documentation and less interest rate than a personal loan, it can be availed instantly. Many who benefit from it regularly know how easy and useful it is. However, for someone who’s applying for a gold loan for the first time, it may seem risky. It’s not, though. To explain this further, here are 3 important things to know before applying for a gold loan:
1. Assess the Credibility of the Lender
Gold loans are based on trust. The person applying for it gives their gold against a loan under the trust that it will be returned to him once the loan is repaid. Many people fall into the trap of unverified people giving gold loans and never getting their gold back from them. Always do a background check on the lender for their history of gold loans. Registered non-banking financial companies (NBFCs) are often the best way to go about a gold loan.
2. Check Out Options
It’s on you to check out various NBFCs and companies that offer a gold loan and read their terms and conditions to find out which is the best for you. When you are thinking of availing a gold loan, you have certain expectations from it. Check out various options to see which company/NBFC best meets your expectations.
3. Know Your Gold
One of the mistakes many people make when availing of a gold loan is not knowing their gold. NBFCs and companies give gold loan price per gram based on the purity of the gold. Knowing your gold will help you get the best value of a loan against your goal. Not only that, if the gold jewelry you’re giving as an asset has gemstones, the value of gemstones is not taken into consideration.
When applying for a gold loan, it’s important to know what you are giving, who you are giving it to, and what you are getting? Knowing all these 3 questions will help you get the best value for your gold loan.
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