Effective Tips To Get Gold Loan At Low Interest Rates

by Doreen B. Trying to make the best out of me

A gold loan is the best option to tide over any financial crisis. It is a secured loan that allows you to access funds against the value of your gold. Since the rate of gold is at an all-time high, you can secure a higher loan amount. The best part is that it serves multiple purposes, which means that there will be no restriction on how you can use the sanctioned gold loan amount. With the funds you get, you can cover the cost of a medical emergency, education, wedding, travel, home renovation, home loan down payment, etc.

Compared to other loans in the market, the gold loan rate is low. However, the gold loan rate depends on your eligibility factors, such as the loan amount, income, credit score, current financial obligations, etc. The plus point is that you can use an online gold loan interest calculator to determine your gold loan rate based on your affordability.

The gold loan rates are comfortable and affordable. However, you need to understand that the loan rates will be different from person to person depending on your eligibility factors, such as the loan amount, income, credit score and current financial obligations. There are online gold loan interest calculators for calculating your gold loan rate.

Here are the top tips to get a lower gold loan rate:

Maintain a good credit score

The first thing your lender checks after receiving your loan application is the credit score. It has a direct impact on your loan approval and also on getting a lower gold loan rate. It contains information about your credit history and credit behavior based on which your lender determines whether or not you can afford to repay the loan without defaults.

If you wish to secure a lower gold loan rate, it would be wise to maintain a minimum credit score of 750. Having a higher credit score can qualify you for a lower interest rate compared to those with a low credit score.

Opt for a lower loan amount

The gold loan rate you get depends on the loan amount you choose, and your loan amount depends on the value of your gold items. Most lenders offer up to 70% to 90% of the gold’s declared value as a loan. Since the value of gold is high in the market, you can secure a higher loan amount. However, opting for a higher loan amount can only get you a higher interest rate because lenders charge a higher gold loan rate to justify the risks involved.

While applying for a gold loan, it is advisable to use a gold loan interest calculator to determine the rate you can afford to include in your EMIs. The best thing is that using the gold loan interest rate calculator is easy, and it gives an instant result.

Show higher income

The eligibility criteria to secure a gold loan are kept at a bare minimum. Almost anyone with the possession of gold items can apply for a gold loan. However, your lender will inspect your monthly income before deciding your gold loan rate. It shows whether or not you can repay the loan with your monthly salary.

At the first glimpse of a gold loan, many people begin to doubt the credibility of such loan. They question the authenticity of these loans, saying that there is easy money everywhere in our country and eventually you will land into a debt trap. That might be true but we need to know that all gold loans in India are legal, as they are governed by RBI and get licensed under them. The eligibility criteria are quite basic and almost everyone can secure a gold loan with just collateral. The lenders prefer to take possession of an item so that there will be no problem with it during any period of the loan. Gold loan rates vary according to the amount and its rate in the global market.

The secret to getting a lower gold loan rate is having a higher income. The higher your income, the better your chances of getting a lower interest rate, provided you do not have any current financial obligations, such as a home loan or credit card. So, to get a lower gold loan, you must disclose all sources of income to your lender and prove that you have the required repayment capacity.

Compare lenders

Not all lenders have the same requirements to secure a lower gold loan rate. It means that you will have to shop around and compare different lenders and their rates. You will need to choose a lender that offers the lowest gold loan interest rate. So, before applying for a gold loan, you should explore your options and then make a decision.

In short

Getting a lower interest rate is crucial in ensuring your repayments without any defaults. You can use a gold loan interest calculator to determine your interest rate based on your affordability.