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Gold loan is the ideal option when you are in urgent need of money. It will help you get the money without losing the asset. However, you need to check the different aspects related to a gold loan. Otherwise, you may end up making mistakes that may turn costly at a later stage. This article is meant for those who consider over the counter, or online gold loan.
Taking loans from established, reliable, finance firms like Manappuram would be the best choice. Such entities have made the identity through customer-centric services and the best interest rates. Besides, unfussy processes including online gold loan options.
We have analyzed the common mistakes made by customers while applying for a gold loan. Furthermore, we discussed the same with top financial institutions including Manappuram to prepare this article.
1. Not Evaluating the Exact Rate of Interest
Companies offering over the counter as well as online gold loans will try to lure the clients through marketing campaigns. They may declare attractive interest rates, concealing the additional charges incurred during the process. You may think the advertised rate is the final one and will apply for the loan. The additional charges would become evident only when you start repaying the amount.
2. Turning a Blind Eye to the Terms and Conditions
At least 90% of the customers don’t read the terms and conditions written in small font, containing numerous clauses regarding the gold loan (for that matter any loan). Rather, they will sign the document blindly, so as not to waste time reading it completely. This may cause you to pay an extra amount as interest. Some of the gold loans may have an increasing type of rate of interest, i.e. the interest rate may go to the next slab after a certain period. Of course, trustworthy finance companies will brief the customer about the gold loan plans. So that he or she can choose the best one.
3. Long Payment Tenure
Customers often choose a longer repayment period in a bid to reduce the monthly EMI. Many do this to regulate the monthly budget and prevent the instalment from hampering it. Nevertheless, it will lead to the payment of a high amount as interest. Try to avoid this as much as possible.
4. Auction of the Assets in case of Default
The finance company is authorized to auction the pledged gold asset in case of default in repayments. You need to check the auction terms thoroughly before availing the gold loan. Companies like Manappuram have a laid down procedure which will ensure that the customer is intimated in advance allowing time to arrange the money. You can consult the executives at the firm regarding the gold auction procedure beforehand. Alternatively, read the conditions properly when availing online gold loan.
5. After-sales Support from the Finance Company is Crucial
The finance company, from which you avail the gold loan, must be client-centric in every manner. They must be ready to support you if you face any kind of problems concerning loan repayment or any other related issues. Reputed entities like Manappuram Finance, which offers over the counter and online gold loan through a quick process, offer excellent after-sales support as well.
The Brief
Gold loan is a secured loan. Therefore, it will not affect your credit (CIBIL) score much. It would be the right option to find funds during urgent requirements. Nonetheless, choose only trusted firms like Manappuram Finance to avail a gold loan in order to avoid unwarranted issues later. The gold loan should not turn into a harassment for you and your family. Even if you are in a financial crunch, think well before signing the loan documents.