Skip to main content

Taking gold loan - Watch out for these……

 

Lower interest rates are attractive, but watch out for extra charges Experts advise it is a loss if you are not able to get your gold back as you get only 70 per cent value as loan

TAKING loan against gold is shown to be the easiest way to raise money either for business or to buy an asset like a house. With Kerala-based gold loans companies Manappuram and Muthoot Finance taking the gold loans business pan-India there are advertisements galore on the benefits of taking a gold loan.

But gold loans are not for everyone and there is more than what meets the eye when raising loans against gold. Here is a checklist on what to look for when taking a gold loan.
Do you really need a gold loan? Gold loans were earlier taken mostly by traders and businessmen to meet the credit shortfall in their business cycle. Today, the salaried class is also being encouraged by the companies to take gold loans since the interest rates are low compared to personal loans or credit card cash advances.

Taking a gold loan to meet a shortfall in the down payment of housing loans is okay but taking a gold loan to trade in the stock markets or to service credit card dues is a certain no-no.


How much money can be raised through gold loans?


It depends on the amount of gold pledged. On paper NBFCs are believed to give 75 per cent of the value of gold against 60-65 per cent by banks but due to the stiff competition many NBFCs are giving even 85-90 per cent of the value of gold as loan. The loan amount could vary anywhere between Rs 25,000 to about Rs 10,00,000 while few NBFCs offer loan amounts more than that.


What are the interest rates on gold loans?

Here again there is a difference between NBFCs and banks. NBFCs charge 20-24 per cent as against 12-14 per cent interest rates charged by public sector banks but NBFCs are believed to be faster in disbursing gold loans with many promising loan processing time as low as five or even three minutes.


What are the other charges? One should not get carried away by the attractive interest rates on gold loans as there are half a dozen other charges for gold loans like the handling and processing fee of about 0.25-0.50 per cent, gold assessing charges of about one per cent and also custodial charges for safekeeping of your gold. Like most other loans gold loans too come with pre-closure charges though a few NBFCs promise exemption of the charges.


How is the repayment process?

Many NBFCs allow the borrower to repay the loan as soon as he gets the money and retrieve his gold. Here the interest would be charged only on the basis of the number of outstanding days of the loan, which could be as less as three days. Banks on the other hand have an organised repayment structure like any other loan.

When it comes to gold loans, what many experts advise is that one can take a loan against gold only when one is sure of repaying the loan and getting the gold back otherwise, there is a possibility of losing the gold despite having taken only 70 or 80 per cent of its value as a loan.

-----------------------------------------------------------------

 

Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in L&T Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

 

Popular posts from this blog

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.
Read more

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli
Read more

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis
Read more

Mutual Fund Review: IDFC Premier Equity Fund

  IDFC Premier Equity Fund, which falls under the presumed high risk group of mid- and small-cap schemes, can rely on astute and timely equity picks. These make it less vulnerable to fluctuations compared with others in the category   IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes.    While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows. Thus, while an investor can always take the systematic investment plan ( SIP ) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for l
Read more

IDFC Premier Equity Fund dividend

  IDFC Mutual Fund   has announced dividend under the dividend option of   IDFC Premier Equity Fund Direct-D . The quantum of dividend shall be   R 4.3464 per unit.   The record date has been fixed as May 06, 2015. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot]
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now