Maximising Value: Tips for Getting the Best Gold Loan Deal

New Delhi: Gold loans are a popular type of secured credit. Gold loans have a lower interest rate than unsecured loans, so many people rely on them to keep borrowing costs down. A simple online application allows you to receive a high-value sanction with flexible repayment options.

Additionally, gold loan eligibility is simple, making them appealing to borrowers. If you need to make your gold loan more affordable, you have a variety of options available to you. Getting approval for a gold loan becomes quick and easy once you meet the gold loan eligibility requirements. Look at these tips that can help you maximise value and get the best gold loan deal.

Get Multiple Offers And Compare Them

It is common for borrowers to choose the easiest option and overlook some crucial details when taking out a loan. The details may include choosing a lender with the lowest interest rate. While interest rates are important in your loan amount, you should also consider other factors. It includes additional charges and processing fees that vary from lender to lender. 

Therefore, you should compare multiple lenders when applying for a gold loan. You can easily get competitive offers from the comfort of your home based on your gold loan eligibility and requirements.

Negotiate For Lower Interest Rates

You can always negotiate for a lower interest rate once the lender determines gold loan interest rates and repayment conditions. Especially with secured forms of credit like gold loans, lenders are open to negotiating interest rates and other terms.

Additionally, if you have a strong repayment history and a good credit score, you can also leverage that to get a better interest rate on your loan. Lenders may offer you a lower interest rate depending on your gold loan eligibility and loan amount. 

Make Sure You Read The Terms And Conditions

After comparing multiple lenders, be sure to read the repayment terms carefully. There are hidden and additional charges included in this. Stamp duty, cash handling penal interest, part-payment charges, and auction charges are some of the hidden charges that may occur.
Late payment charges and loan processing fees are other costs that may add to your total loan amount.

Consider Different Repayment Options

You can save money on your gold loan by choosing the repayment option that best suits your needs and budget. There are several flexible repayment options available when you take out a gold loan, including:

• Standard EMI option
• Interest-only Option
• Bullet Repayment
• Partial Payment Option

Calculate Your Loan Amount 

If you want to save money on a gold loan, you should borrow only the amount you need. This is because a higher principal amount will result in a higher interest rate and vice versa. Increasing your interest rate compensates for the risk associated with your loan. 

So, only apply for the amount you need to avoid paying additional interest. Assess your loan requirements before applying to a bank or NBFC. 

Look For The Balance Transfer Facility

Transferring your gold loan to a low-interest lender is another way to save more on your gold loan. An EMI calculator can help you calculate your monthly payment well in advance.  By calculating this, you can determine how you may be required to pay more than the principal amount on a high-interest-rate loan. If you transfer your loan to an interest-rate-reduced lender, you can save a lot in the long run. 

You will need to fill out a balance transfer application with the new lender. Once you have gathered your existing bank's or NBFC's information, you can begin the balance transfer process.

Choose The Correct Loan Tenure

The fastest you can pay off your gold loan, the more money you will save. If you choose a shorter loan tenure, you can close your loan early. Yet, it is important to note that if you choose a short tenure, your EMI will be higher. 

Lenders may even charge a higher rate in some cases. If you can afford higher monthly payments, a shorter tenure is a better option. To plan your finances better, you can use a gold loan EMI calculator to calculate your monthly payments. 

Make Pre-Closure Plans For Your Loans

The term "pre-closure" refers to closing a loan account before the loan term expires. By paying the entire outstanding amount, you can close your loan account. However, some lenders may charge you 1%-4% as pre-closure fees. Some even waive pre-closure charges on gold loan repayment. As a result, choosing a lender without such additional charges will help you save more on your gold loan. 

Gold loan offers the benefits of lower interest rates and flexible repayment option, that is why it is appealing to borrowers. Moreover, you can maximise your gold value by following the key tips mentioned in the article. Also, note that interest rates aren’t the only factors to consider; there are other factors that you need to consider, like additional charges. Furthermore, IIFL stands out as a reputable lender offering gold loans. With IIFL, you get competitive rates on transparent terms and with flexible repayment options. So, make the most of the gold loan by applying these tips and choosing a reliable lender like IIFL.