A gold loan lets you borrow against gold jewellery, usually within a few hours and with little paperwork. Because it is so easy, many borrowers don't compare offers. These six points make a real difference.
1. Loan-to-value (LTV)
Lenders lend only a percentage of the gold's value, within the limit set by the RBI. A higher LTV gives you more money but leaves less cushion if gold prices fall.
2. Interest rate and how it is charged
Ask for the annual rate, whether it is charged monthly, and whether the rate increases if you miss a payment.
3. Repayment options
Common options are regular EMIs, interest-only payments with the principal at the end, or a single payment (bullet repayment) at maturity. Choose what matches your cash flow.
4. Charges
Check processing fees, valuation charges, and any charges for part-payment, early closure or late payment.
5. Purity and weight assessment
Ask to see how your gold is weighed and tested, and get the net weight and purity in writing on your loan documents.
6. What happens if you can't repay
Understand the notice the lender must give before an auction, and how any surplus after auction is returned to you.
We work with established lending partners, including Muthoot Fincorp, and can help you compare offers and complete the paperwork.
Loans are sanctioned by the lender as per its policies. Fintune does not lend money directly.