Avoid These Mistakes When Buying Gold To Get A No-Hurdle Gold Loan
- January 27th, 2022
In India, the number of applications for loans secured by gold or gold loans has increased dramatically in recent years. The COVID-19 epidemic further fuels this significant expansion. Its huge popularity among Indians is primarily due to the cheap interest rate environment.
A gold loan has a substantially lower interest rate than unsecured credit choices like personal loans. However, to easily obtain a gold loan, applicants must bear in mind a few important aspects when buying gold jewellery.
What Errors Should You Prevent Before Buying Gold?.
Before buying gold jewellery, be sure to avoid the following mistakes:
- Failing to confirm the ornament's weight.
- Failing to verify its purity.
- Buying jewellery at an arbitrary retailer.
- Paying more for purchases.
- Failing to inquire about the jewellers buyback policy.
- Avoid seeking out BIS hallmarks.
Let's examine them carefully:
One must keep in mind that a variety of factors affect the price of gold ornaments while making a purchase. Additionally, one should make sure the gold they have purchased is of standard grade and bears the necessary markings that attest to this.
Considering this will enable people to pledge their gold for a larger loan value. In addition, it will assist in obtaining a greater resale value in case of financial difficulty.
The following are some common blunders to avoid while buying gold:
Failing to verify its purity
One must keep in mind that a variety of factors affect the price of gold ornaments while making a purchase. Additionally, one should make sure the gold they have purchased is of standard grade and bears the necessary markings that attest to this.
Considering this will enable people to pledge their gold for a larger loan value. In addition, it will assist in obtaining a greater resale value in case of financial difficulty.
The following are some common blunders to avoid while buying gold:
Failing to verify its purity
The standard purity level for gold jewellery is 22 Karat, or 91.6 percent gold. Pure gold has a purity rating of 24K (99.9%), but this is not appropriate for making jewellery. 18 karat gold and 14 karat gold only contain 75 percent and 58.33 percent pure gold, respectively, because each karat of gold is equal to 4.2 percent pure gold.
Jewellers use 14 karat, 18 karat, or 22 karat gold since 24-carat gold cannot be used to make jewellery.
Buying jewellery at an arbitrary retailer
Choosing the best jewellery store can be challenging for people because there are so many of them. For simple identification, reputable jewellers will stamp their hallmark logo or abbreviation on the gold ornament. Furthermore, reputable jewellers won't sell or misrepresent impure gold as pure in order to risk their standing in the industry. With small merchants, this is frequently the case. For the highest level of safety, customers looking to buy gold jewellery must consider the reputation of the jeweller.
Paying more for purchases
The method used to make the gold ornaments that will be acquired is another aspect that must be examined. These days, it's typical to see jewellers making ornaments on machines. These ornaments have cheaper making costs than those that are man-made. When discussing costs, it's important to note that because they mirror the current gold rates, people frequently get swindled into paying larger charges. To achieve cheaper purchases, one must insist on fixed making fees.
Failing to inquire about the jeweller's buyback policy
Equally crucial is making sure the jeweller provides buyback options. Even with BIS marking and fineness numbers, there are always more deductions when a person chooses a different lender to sell their gold items. Assume people have the option of trading in their worn-out gold jewellery for new pieces from the same jeweller. The deductions would then be minimal, allowing people to swap their goods for the most money possible.
Additionally, buying gold during high-demand times is a bad idea. Gold always has a higher selling price for special events, making the purchase pricey. Customers should always make plans to purchase gold during off-seasons when the price is typically cheaper.
Avoid seeking out BIS hallmarks
The sole GOI-approved organisation for testing and quality-sealing is the BIS (BIS Hallmark). Customers will be able to obtain a better value per gramme on a gold loan if they pledge BIS-hallmarked gold jewellery as collateral. Additionally, choosing gold jewellery with the BIS hallmark will make it simple to obtain gold loans with cheaper interest rates.
