Any of the private and public banks, Non-Banking Financial Companies and FinTechs offer people an amount as a loan for the gold they offer on the condition that they repay it along with interest.

Unlike all other loans with specified terms or restrictions for utilizing the money, the gold loan rate per gram of your gold provides more freedom to utilize the cash however you wish, such as for weddings, and student loans, including any unexpected situations.

Once it concerns a secured loan method, a gold loan rate per gram of gold in any of its forms is considered among the popular options. The gold loan providers offer a variety of repayment alternatives, involving EMIs and pay the interest option in which the borrower can repay the interest of gold loans first. The application procedure to get a loan against gold is also simple.

CIBIL score and its role in gold loan

CIBIL Score, also known as credit score, is a factor in determining a borrower’s trustworthiness in any money transaction, including borrowing and repaying money from a financial institution. This three-digit score defines your creditworthiness in almost every other loan arrangement unless it is a gold loan.

There is no need for a good CIBIL score in a gold loan. Besides, the gold loan rate per gram and the interest of gold loans are calculated on the basis of the current market value of the gold alongside the arrangements an organization offers.

However, if you do not make repayments on a gold loan, your CIBIL score will suffer. Getting a fixed gold loan rate per gram of your gold is possible even if you have a CIBIL score of less than 500. In case you are not able to afford the remaining loans along with gold loans and the interest of gold loans, it is preferable to choose the best arrangement that has the most favorable repayment option.

Effect of gold loan on your CIBIL score

To issue any kind of personal loan, the Reserve Bank of India has created the demand to verify CIBIL Score. Personal loans are considered riskier than other loan arrangements that are secured with valuable collateral like when you acquire a gold loan rate per gram of the gold you provide to the lender.

Offering gold as collateral is an assurance for the banks and NBFCs to not question your credibility on repayments that include the interest of gold loans. Giving importance to all the repayments of the loan amount and the interest of gold loans will help you improve the CIBIL score that will later help you in getting approval for more personal loans.

The contribution of gold loans in improving the CIBIL score

Getting a fixed gold loan rate per gram of gold you have is an effortless way to improve your credit score. It is effortless because of these factors:

● Quick Processing: Getting a loan against gold is a very fast process that does not require much time for application procedures and the crediting of the amount into your bank account.

● Fewer documentation requirements: Acquiring a gold loan rate per gram of what you offer to the banks or NBFCs needs less documentation compared to other loan arrangements as it takes your gold as the major security in the transaction.

● Lower Interest rates: The interest of gold loans solely depends on the schemes offered by the lenders and the current market value of the gold. However, the interest rates are pretty low in the case of a gold loan.

● Affordable repayment options: Students who take a gold loan can choose a scheme that offers the choice to repay the loan amount after they get employed. In this case, they can pay the interest of gold loans before paying the loan amount.

● Security of the collateral: Getting your collateral back is imperative for the borrower when he repays the whole amount of gold loan along with the interest of gold loan. Banks and NBFCs assure the safety of the gold in its physical form until the borrower completes the repayments.

Fees involved in a gold loan

The interest of gold loans is a fee that a borrower has to pay along with the actual amount of gold loan rate per gram they get. Even though there are no processing fees for gold loans, lenders might impose charges for different procedures in the loan arrangement.

Moreover, pre-closure charges, late payment charges, renewal fees, and more could be expected regarding the gold loan rate per gram arrangement you choose. Pre-closure charges are imposed on you when trying to pay back the loan amount alongside the interest before the actual expiration date of the loan.

Late payment fees is what will be added to the loan amount due to the inability of the borrower in repaying the debt on time. Renewal fees come into play if the borrower renews the loan beyond the original validity of the gold loan. Other extra fees you can expect include taxes and fees imposed by the government.

How and where can I get a gold loan?

Anyone who possesses a certain amount of gold can get a loan from reliable lenders like Manappuram Finance for affordable interest rates and tenure arrangements. All your financial needs could be satisfied with the amount of money we offer and we assure great value for your gold.

You can visit our branches across India for an instant gold loan or you can choose the doorstep loan system. In all major cities, we provide doorstep gold loan arrangements in which our experts arrive at your location free of cost and help you with all the procedures to get credited with a loan amount at the earliest. We assure great security for all your gold assets until the day you complete the payments and close the loan.