India, the world's second-largest gold consumer, has a long history of gold build-up. According to the World Gold Council, Indian individuals own over 22,000 tonnes of unused gold. To capitalize on this potential and turn it into a valuable financial asset, the Indian government, banks, and NBFCs have actively promoted gold loans.
Low-interest gold loan give a secured borrowing alternative to satisfy financial demands and crises. Gold loans in Tirupati have lower interest rates than personal and credit card loans.
Considerations before taking out a gold loan
Here are some important factors to consider before applying for a low-interest gold loan to ensure a positive borrowing experience:
Interest Rate: Gold loans in Tirupati are backed by collateral. However, interest rates can vary among lenders, so it's advisable to compare rates from different lenders.
Early Repayment: Borrowers have the option to close the gold loan before the designated tenure. Non-Banking Financial Companies (NBFCs) typically do not impose any fee for prepayment, while banks may charge a prepayment penalty ranging from 1% to 3% of the loan amount. Generally, there is no minimum lock-in period for gold loans, but if there is one, it usually spans from 1 to 6 months.
Processing Fees: Some NBFCs may waive the processing fees as an incentive to attract customers. On the other hand, most banks impose a processing fee as a percentage of the loan amount, typically ranging from 0.50% to 3%. This fee is subject to Goods and Services Tax (GST).
Late Payment: Late payment on a gold loan can lead to additional costs. Lenders may impose a fee for late payment, and the specific amount varies between lenders. Typically, it can be up to 2% per annum on top of the applicable interest rate.
With so many benefits, a low-interest gold loan is one of the best options to meet any financial emergency. Make certain that the gold loan in Tirupati is made on schedule and that the loan is appropriately closed.
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