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Over the previous years, gold loans have experienced a quantum shift in India. This notable spike in gold loan interest rate is further powered by the COVID-19 epidemic. The low-interest-charge atmosphere is primarily the reason behind its overall vogue among Indians.
Unlike the unprotected loan options, such as private loans, the interest charge imposed on a gold loan is incredibly lower. However, clients must keep in mind some important aspects while buying gold jewellery to obtain a gold loan without any nuisance.
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What Are Some Blunders to Avoid Before Buying Gold?
The following are the blunders to avoid before buying gold ornaments:
- Not confirming the jewelry’s weight
- Not verifying its worth
- Buying from a random ornamental store
- Purchasing at higher prices
- Not confirming if the jeweler suggests buyback
- Not seeking a BIS sign
When buying gold jewelry, one must believe that several aspects specify their prices. Also, one should ensure that the bought gold is of standard grade with the requisite markings, demonstrating the same.
Holding these in mind will assist people to attain a higher loan amount when they promise their gold. Similarly, it will assist one to bring a higher resale amount in the situation of a cash crunch.
Some typical blunders one should avoid while buying gold :
1. Not confirming the jewelry’s weight
Gold ornaments in India are marketed by weight. If expensive stones and gems are studded, they are further added to the weight. When buying such gold ornaments, clients often fail to evaluate the weight individually. And, one finishes up spending more than the genuine since most jewelers weigh a bit in its whole.
2. Not verifying its worth
22 Karat or 91.6 percent of gold is the standard innocence rating of gold jewelry. 24 Karat is the innocence rating of pure gold (99.9 percent); yet, this isn’t appropriate for manufacturing ornaments. Since every karat of gold is comparable to 4.2 percent pure gold, 14 karats and 18 karats of gold only hold 58.33 percent and 75 percent pure gold, respectively.
Since 24 karats cannot be utilized for ornaments manufacturing, jewelers use 22 karats, 18 karats, or 14 karat gold.
Gold ornaments bought from any reasonable jeweler in India will have the BIS marking, 22 karats marking, and elegance number imprinted on them. Such markings guarantee the most suitable value per gram on an ornamental loan. Obtaining a gold loan with 22K gold is very simple. Hence, buying gold ornaments without verifying their innocence is a definite no. Verifying the BIS Hallmark and the innocence rating of gold is important when purchasing ornaments or using them as security for obtaining a hassle-free gold loan. These ratings are deeply verified before any financer sanctions the loan amount.
3. Buying from a random ornamental store
Assuming that there are multiple ornamental stores, picking the appropriate one can be tough for people. Respected jewelers will put their abbreviation or hallmark logo on the gold jewelry for easy recognition. Also, famous jewelers will not risk their fame in the market by passing off or selling contaminated gold as pure. This is usually the case with small merchants. Clients planning to buy gold ornaments seek out the prominence of the jeweler for utmost protection.
4. Purchasing at higher prices
Another must-verify aspect is the manufacturing process of gold jewelry to be bought. It is typical in today’s era to come across jewelers creating machine-made pieces of jewelry. Demanding fees on such pieces of jewelry are comparatively lower than man-made pieces of jewelry. When talking of demanding fees, it’s worth noting that since these costs reflect the contemporary gold prices, one is often fleeced into producing higher amounts. Thus, one must demand fixed making costs to guarantee cheaper investments.
5. Not confirming if the jeweller suggests buyback
It is equally necessary to guarantee that the jeweler proposes buyback facilities. Despite the fineness numbering and BIS marking, when a person selects a different banker to sell gold pieces of jewelry, there are more speculations. Let’s say people can swap their old gold ornaments for a new one from the exact jeweler. In that situation, the speculations are borderline, and therefore, people can get the highest value for their swapped items.
Also, buying gold during extreme seasons isn’t a clever move. The selling price of gold at festivals always rises, making the investment costs. Thus, clients should always prepare to purchase gold during off-seasons when the costs are on the lower side.
6. Not seeking a BIS hallmark
The BIS is the only certified GOI organization for quality sealing and testing (BIS Hallmark). Clients collateralizing gold pieces of jewelry with BIS hallmarking will assist them to convey a more increased value per gram. Similarly, choosing gold jewelry with the BIS hallmark will readily reduce gold loans at inferior interest costs without much annoyance.
The End
It goes without saying applying for a gold loan is a better option than purchasing gold in several growth-oriented cities in India including Hyderabad. Stay away from such mistakes while buying gold with our article, or just choose a gold loan to make better use of gold. People living in Hyderabad have a great opportunity to avail of a gold loan.
