Financial crises can happen in a matter of time and might turn things worse for anyone in no time. It is the only reason why people tend to invest money in diverse instruments that can provide them with better returns and can act as a hedge during the time of crisis.
A gold loan is one of the options at the time of financial crises.
Investing in multiple instruments helps in realizing a decent interest from one commodity even when most are plummeting. One such diverse instrument is a gold loan. Gold loan in India acts as a savior for the people who possess the yellow metal in the form of ornaments. It is always an excellent option to buy gold jewelry as it can help you to get capital quickly.
Things to Check When Buying Gold Jewelry
Gold is a precious metal, and you must know about the nitty-gritty of the yellow metal. The different things that you need to check when purchasing the gold jewel are given below:
The Purity of the Gold
Purity is a prominent thing for any gold jewel. The yellow metal is so fragile that no ornaments can be made with pure gold. Due to this reason, the jewelry makers add different other metals to make gold jewels. However, the capital money for a gold loan depends on the worth of pure gold present in the security.
To get more yield when taking a gold loan, you must look for 24 karat gold as it has lesser impurities than 22 karats or 18 carats gold-the lower the value of carats, the smaller the value of the shining metal.
Machine-Made or Handmade Ornaments
It is quite natural that the ornaments made by the machines carry a lesser price. You should be aware that the gold loan lenders do not consider if the gold jewelry is made by hand or machine. So, it would help if you avoided the handmade designs. However, the handmade gold jewelry might have an alluring design, but in terms of the gold loan, it cannot provide you with any extra benefit.
Nowadays, gold ornaments come with hallmarks. It is considered as a determinant that the gold is pure. If you have gold jewels that comprise of a trademark, you can expect the gold loan lending companies to give you more cash against it. So, you should always purchase the gold ornaments that have the hallmark.
Weight of the Gold
The weight of the gold must be checked by the purchaser when buying the jewelry. If you are purchasing the gold ornaments keeping the fact of the gold loan in mind, it can be a wise decision to stick to such designs that do not include precious or semi-precious stones.
So, these are a few things that you need to check when buying the gold jewels that can be utilized by putting as security for a gold loan.
Now, for taking a gold loan, you need to search for an organization that provides you with benefits and flexibility. Here are some points that you must keep in mind when choosing a gold loan lending entity are as follows:
Market presence: Any organization that is present in the market for more than three years can be considered as reputed. You must check the year of the establishment of a company on the internet and try to find some necessary details about it.
Customer base: Make sure to go through the comments of the customers on the official website of the gold loan dealing entity. It can give a basic idea to if the company is safe to keep the security and avail of the money plus the reviews also help one to compare between companies. But make sure you don’t follow the reviews blindly.
LTV and interest rate: Both LTV or Loan to vale and interest rates on the gold loan that is given by the lending entities differ a lot. Try searching for a company that offers you a higher LTV for a gold loan and a lower interest rate. In general, the interest rates for a gold loan is quite affordable due to the presence of the collateral.
All the above facts can help you to plan for taking a gold loan in the future from a responsible and reliable entity.
CAUTION: Most often, people hold this misconception about selling their gold and getting money in return. This is the biggest mistake you can make. Gold is the most precious resource that we can owe to ourselves. You can use and reuse the gold ornaments multiple times. After the complete payment is made, the borrower can get back the gold.
Also, there is no other investment option that comes with such flexibility. Also, the credit score is something that does not matter in terms of securing a loan. People with low credit scores can also avail of the loan. Moreover, after obtaining the loan, people can improve their score provided only if regular payment of the loan is being made.
Thus, gold is a fantastic instrument and is worth every penny. The lower interest rate and higher LTV makes it an option to consider. It has an immense potential to help one attain his dreams. So, It’s time to unblock your gold jewels from the locker and lock them in your bank lockers.