The importance of
Gold Loan Settlement
The Importance of Gold Loan Settlement
Gold loan solutions in India have been prevalent for decades. People always seek assistance from banks and other private institutions for gold loans during financial crises. Earlier, people blindly depended on gold loan solutions for immediate funds. They never considered its drawbacks or after-effects. But in today’s scenario, the circumstance is different. People are intelligent enough to question themselves about whether pledging their gold for money is a good financial option.
In an era of having a dilemma about whether to sell your gold or to rely on gold loan solutions in India, it is imperative to discuss the cons of gold loan solutions and why it is not so celebrated as a reliable financial option in the present day. In this blog, we’ll be discussing why gold loans can not be considered the best financial options.
Why Gold Loans Are Not the Best Financial Option?
Although individuals receive a decent amount while pledging their gold initially, they’re liable to face a myriad of issues in the upcoming months. Considering all these factors, listed here are the reasons why gold loan solutions in India are not suitable for financial aid.
Limited Loan Value:
When you sell your gold, you receive the full worth of your gold in the first go itself. On the contrary, when you pledge your gold, the lenders provide you with only up to 70% of the current market value of your gold jewelry. This is the primary concern as you are not getting the full worth of your valued asset, limiting your financial relief.
High Interest Rates:
Most gold loan institutions impose hefty interest rates on gold loans, with annual rates ranging from 9.50% to 28%. Month-to-month, this summons up a prominent financial burden, rather than a relief, making it more expensive to handle.
Risk of Increased Interest:
Have you ever thought of what happens if you miss an interest payment for a gold loan solution in India? Well, the answer is, that if you fail to pay the interest regularly, your loan rate changes and the interest will start accruing from the loan advance date. This accumulation may effectively lead to higher debts.
Penalties for Late Payments:
You should opt for gold loan solutions only if you are confident enough to meet regular payments. Missing regular interest payments results in heavy penalties and additional charges. This might increase your financial liability, rather than easing it.
Risk of Losing Gold in Auction:
You might have already opted for a gold loan because of a financial crisis. Gold loan solutions in India are financial aid, which is available only in the initial month. From the very next month, it is an economic liability. You might have decided to opt for a gold loan as you have a deep connection with your gold. But, what if you failed to repay the loan within the agreed timeframe? The lender may auction your gold and will recover all the dues. But the saddest part is, that they are not going to pay any excess amount for your gold as per current market value. It is a clear note that you may lose your gold without receiving its full worth.
Impact of Credit (CIBIL) Score:
Once your gold is auctioned, you are more likely to feel depressed as you lost a valuable asset for almost nothing in return. Now to add to this misery, if your gold gold is auctioned, it negatively impacts your CIBIL score. This might hinder your future loan approvals or other banking services, making financial support during tough times a daunting task.
Prolonged Financial Burden:
Gold loan solutions do not guarantee timeless financial freedom. The census shows that about 90% of borrowers struggle to repay the loan; failing to release their gold. This leaves them trapped in ongoing debts. It is when they revise their thoughts and feel that selling gold is a better option rather than opting for gold loan solutions.
Final Thoughts
Thus, gold loan solutions are never a long-term financial solution. The risk of higher interest rates, penalties, and the loss of your valuable asset all exert pressure on you rather than acting as financial aid. Are you someone going through this mental stress? It is why, we always suggest you sell your gold rather than opt for gold loan solutions. But have you already pledged your gold for a gold loan? Are you going through the financial and emotional baggage of repaying loans and losing your gold? Nevermind! The gold loan settlement scheme from HNS Gold is for your aid. We assist you in releasing your gold from the lenders by paying them the loan amount and buying your gold. The bonus part is, that we will pay you an extra amount if the worth of your gold is beyond your loan settlement amount. In short, you receive the full worth of your gold in this gold loan settlement scheme.