Firstly let’s consider who to approach for a gold loan whether a Bank or an NBFC ? Both of them have pros and cons. While a bank can offer you a lower interest rate an NBFC CANNOT. An NBFC can though give you a pretty hefty valuation for your gold that you have pledged as collateral unlike the bank. Certain organized sector NBFCS are more liberal and have very flexible and easy to go to repayment options. The only thing common to them is that they both offer a 75% loan to value ratio.
The couple amount of repayment options that an NBFC offers are EMI or for the second one can even take up the BULLET REPAYMENT option where only the interest payment of the loan is deducted upfront. Suppose if the loan amount is 2,00,000 and the interest payment is 20,000 so the lender will be deducting 20,000 and the rest 1,80,000 can be given as the principal amount once the loan matures that is at the end of the loan tenure. This is a very prominent method followed by NBFCs.
However when one comes to the banks then there is an option where one can pay equated amounts of gold loan interest rate as EMI and the principal amount as and when the loan matures. The biggest advantage when it comes to availing gold loans is there is no processing fee. But before you avail a gold loan it is vital to understand your repayment capacity as the Axis Bank gold loan has the right to auction your gold to recover the remaining loan amount in case of default.
So incummumbing everything in mind your repayment options, your net inflow and the certainty of your business modeling you need to avail the right option that is investing in gold loans as it is the least cumbersome and the most flexible option to convert all yours needs into your dreams.
So, if you are looking for a way to gather quick finances to tide over the current cash crunch, gold loans are the easiest sources to tap into right now. With rise in gold rates , you can get a higher amount of loan for your gold.
Must read: Gold Loan for good growth
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