We have completed four weeks of lockdown and there is still one left to go before the government announces its future course of action. The economy has been hit during this period and people have been forced to dig into their emergency funds. If your financial meets are not met by savings, then opting for loan is the next best option. While you can always take a personal loan, gold loan gives you the comfort of having to pay a lower interest rate. Gold has been the most sought after metal in India, with almost every household having some of it and therefore a chance to utilise it should not be ignored. 

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Gold loans require minimal paperwork and lenders don't check the borrowers' credit scores or ask for income proof to evaluate cash flows. However, you need to be careful while applying for it.

What things to keep in mind?

The loan amount you are likely to get will depend upon the valuation of the gold which involves verification of its purity. The best amount will be sanctioned for a karat range of 18 to 24k. You can opt for the loan either through banks or NBFCs. Both have their own advantages. The bank will require more formalities while NBFCs will charge you a slightly higher interest rate. 

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The next thing you need to look at is the repayment option. Besides the regular equated monthly installment (EMI), a borrower can opt for bullet payment. In this, the lender will deduct the interest portion upfront from the loan amount. The other way is to pay the interest in form of EMIs and pay the principal amount at the end. This method is most popular with banks.

The total number of novel coronavirus cases in India rose to 27,892, the Ministry of Health and Family Welfare said on Monday. In a morning update, the Health Ministry said, of the total cases at least 20,835 are active. A total of 6,184 individuals have been cured and discharged while 872 people lost their lives.