Gold Loans:
Amendments in Mode of Repayment
Gold Loans: Amendments in Mode of Repayment
After taking a gold loan, many individuals wait to renew or repossess the loan just before the maturity date. Financial institutions in the field are gearing up to end this trend. Instead of the aforementioned schemes, the idea is to introduce and encourage monthly repayment mode in Equated Monthly Installments (EMI) only. The Reserve Bank had expressed deep concern over the sharp increase in gold mortgage lending and the failure of some financial institutions to comply with the norms. It is in this context that financial institutions have been forced to introduce only EMI facilities. Thus, before planning to pledge your gold in gold loan companies in India, you need to comprehend the new amendments in gold loan schemes.
Gold Loan EMI: A Bridle to Your Financial Freedom
With the introduction of the EMI facility, gold loans will be converted into term loans. That is, the principal and interest must be repaid in monthly installments (EMIs) like other loans. Although this facility is currently in place, most customers tend to renew their mortgages and reclaim their gold at the last minute. About 75 percent of gold loan customers in commercial banks currently follow this method.
Many individuals used to take advantage of facilities such as paying interest only and then making a last-minute principal payment, or using the bullet payment facility to repay both interest and principal in one go at the last minute. The current plan eliminates all of these and introduces only EMI.
The Concerns of the Reserve Bank
The Reserve Bank has highlighted that some financial institutions are not adequately complying with several regulations related to gold loans, including KYC rules, cash limits, loan-to-value (LTV) ratios, purity checks, and other necessary conditions. Additionally, there have been reports of loans being issued to multiple individuals using the same PAN card. The Reserve Bank identified several lapses, such as verifying the purity of gold in the customer’s absence, failing to adhere to the LTV limit of 75%, violating loan agreements, and allowing usage of funds for purposes other than those intended.
LTV Value: Maximum at 75%
Financial instability could present chances for individuals seeking fortune enhancement.
The new gold loan amendment establishes that a maximum of Rs 20,000 can be given in cash to customers for gold mortgage loans. If the loan amount exceeds this limit, it must be transferred digitally. The Loan-to-Value (LTV) ratio is the maximum loan amount. The maximum LTV is 75% of the total value of the gold pledged to the lender.
Unlike selling gold, where you receive the full worth of your gold, gold loan solutions in India will provide you only a maximum of 75% of the total value of gold> In addition, you’ll have to repay monthly EMI. Selling gold gives the funds necessary to engage in businesses or invest in resources with the potential for prosperity. Individuals can use earnings from a gold sale to establish a small business, buy a rental property, or invest in sectors expected to grow.
Gold-buying companies like HNS Gold offer dependable evaluations, transparency, and instant settlements, providing customers the confidence to reinvest wisely. While starting a franchise of a reputed company is also a lucrative option, commencing a partnership with the company to which you have sold your gold indirectly possesses the hold of your sold gold. In the present economic landscape, gold funds can serve as an initial platform for investors seeking potential revenue streams and financial independence. The franchise option offered by HNS Gold is a perfect stepping stone to financial independence.
EMI and Gold Loan
When the repayment of a gold loan is based on Equated Monthly Installments (EMI), there is typically a fixed repayment period, which can be at least three years. During this time, a minimum amount must be repaid each month. In addition to using gold as collateral, financial institutions will also assess the repayment capacity of the customer before granting a loan. This means that obtaining a gold loan may no longer be easy even if you provide gold as collateral.
Many people turn to gold loans during financial crises, but recent regulations suggest that these loans are becoming more accessible only to those who are financially stable. Hence, if financial support is what you need, why do you need to be scrutinized by a financial institution that takes over the possession of your gold by offering you just 75% of its value? Instead, it is better to sell your gold, where the gold-buying company will empathize with you rather than question your financial stability.
Inflexible Utilisation of Funds
Another unfavorable factor of gold loan solutions is the inflexibility in utilization of funds. Many people are availing of gold loan solutions for agricultural purposes at low interest rates. However, the Reserve Bank has accused some financial institutions of not bothering to verify that the customer is using this amount for agricultural purposes. The financial institutions believe that by assessing the customer’s repayment capacity and introducing the EMI system, they can ensure that the funds are used as per the loan agreement.
Thus, with the amount from gold loans, you are not flexible to utilize the funds according to your needs. Although you need to repay the amount with interest, in actuality, you have no full possession even of the funds received. On the other hand, if you decide to sell your gold, you’ll receive an instant cash-for-gold payment with full possession of your funds. You’ll have the flexibility to decide what to do with the funds.
Sell Gold in Chandigarh
Another unfavorable factor of gold loanThe gold loan amendments by the RBI might make it difficult for financially insecure individuals to receive as well as repay loans. Thus, if you require financial support, rather than going for gold loan solutions in India, you can sell gold for cash in Chandigarh and be financially independent. Gold-buying companies in India like HNS Gold, do not mandate a stable financial condition from customers to sell their gold. If you are in search of reliable gold buyers in Chandigarh, HNS Gold is the ultimate answer. solutions is the inflexibility in utilization of funds. Many people are availing of gold loan solutions for agricultural purposes at low interest rates. However, the Reserve Bank has accused some financial institutions of not bothering to verify that the customer is using this amount for agricultural purposes. The financial institutions believe that by assessing the customer’s repayment capacity and introducing the EMI system, they can ensure that the funds are used as per the loan agreement.
Thus, with the amount from gold loans, you are not flexible to utilize the funds according to your needs. Although you need to repay the amount with interest, in actuality, you have no full possession even of the funds received. On the other hand, if you decide to sell your gold, you’ll receive an instant cash-for-gold payment with full possession of your funds. You’ll have the flexibility to decide what to do with the funds.
Gold Loan Settlement Scheme
Have you already pledged your gold to a gold loan company? Do you regret your decision? Have you ever felt that selling your gold could have been a better financial solution than pledging your gold? If yes, remember, you’re not too late. Empathizing the financial hardships of individuals who pledged their gold, HNS Gold introduces a gold loan settlement scheme by which you can settle your gold loans. Our diligent staff will assess your gold loans and offer you payment to release your gold from the gold loan company. Later, we buy gold from you by offering an additional payment to equalize the full worth of your gold. In short, you receive the full payment of your gold following the current market rate through our gold loan settlement.