The gold loan is a secured loan that a borrower takes from a lender by pledging his/her gold ornaments. The bank keeps custody of the gold till the loan is repaid. The tenure for loan repayment is generally between 12 and 18 months. Usually, up to 75% of the value of gold is offered after valuation. Gold coins and bars offer higher value as compared to gold jewelry but is not accepted by many lenders. However, if you are in immediate need of funds, a loan against gold is the best option.
How much can you borrow?
Gold loan is a short term loan with tenure of up to 36 months. Lenders offer gold loans per gram to provide enhanced convenience to the borrowers. They have their maximum and minimum borrowing limits for the same. Since gold loans are secured loans, they are available at a lower interest rate as compared to unsecured loans such as personal loans or business loans. Banks also offer concessional interest rates for loans obtained for Agriculture purposes and gold loans availed by women.
Eligibility for gold loan:
Gold loans are secured loans and hence come with lenient eligibility criteria and minimal documentation. Hence, lenders generally disburse the loan in just a few hours. People who are eligible for an online gold loan can even get the loan amount in just a few minutes. You need to be 18 years or above and should be the legal owner of the ornaments. The banks do not consider factors such as your income, age, credit score, etc. to approve gold loans as you are keeping your jewelry as a security against the loan amount.
In case a borrower is unable to repay the loan, the lender will have the right to auction off the gold jewelry to recover their money.
What type of gold jewelry can be pledged?
Most lenders generally accept gold jewelry with purity ranging between 18 and 24 carats. Some of the lenders also accept gold coins of 24 carats with a purity of 99.99%.
How to apply for a gold loan?
To apply for a gold loan, you need to submit a few important documents such as PAN Card, identity proof, and address proof along with the application and photograph. You can apply for the loan either online or by visiting the bank’s branch.
After submitting the loan application, a gold loan agreement is signed between the bank and the customer. Next, the gold that has been evaluated is deposited with the bank for disbursal of the loan. The lender will instantly approve the loan and disburse the loan amount.
However, if you are not able to repay your loan on time or you miss a payment, the bank or finance company can sell the gold and recover its dues as per the loan agreement terms.
So, a gold loan is one of the best options to meet your immediate financial needs, such as marriage or medical expenses. Moreover, it can be easily availed in just a few clicks and minimal documentation.
So, a loan against gold is one of the best options to meet your immediate financial needs, such as marriage or medical expenses. Moreover, it can be easily availed in just a few clicks and minimal documentation.