Gold Loans in a Nutshell: Top Gold Loan Companies in India
Secured loans that use gold jewellery as collateral are known as gold loans. The lender lends you money based on the gold jewellery you pledge. A percentage of the gold’s value is usually used as a loan amount. Monthly installments are available for repayment of the loan with so many top gold loan companies in india. The gold jewellery is returned to you after the repaymeThere are a number of financial institutions, including nationalised banks, that offer these loans at reasonable interest rates.le interest rates. These loans are usually used to meet a sudden financial need, such as a child’s education or a marriage. A loan is often preferred to selling gold.
A lender asks you to pledge your gold jewellery as collateral for a loan. Following a review of the documents, the lender sanctions the loan based on the gold’s value. Your gold jewellery may also be assessed at home by some gold loan lenders. It usually takes one day to complete the process.
Applicants for gold loans must submit their identity proof, which could be a driver’s license, PAN, passport, or Aadhaar card. If you do not have a PAN card, you will be asked to submit Form 60. Electricity bills, ration cards, and telephone bills are acceptable proofs of address. As well as the passport copy or driver’s license, you need to submit a proof of your signature.
A passport-size photo must also be provided. Your income proof may also be required by some lenders.
Compared to unsecured loans like personal loans, gold loans have lower interest rates since they are secured loans. A non-banking financial company (NBFC) may charge a higher interest rate than a bank. A gold loan should therefore be compared with other interest rates before applying.
Different providers charge different interest rates on personal loans, which can be higher than 12.75% or more. All you need to do is find the company offering cheapest gold loan in india and you are all set.
There is a processing fee of up to 1% of the loan amount when you apply for a gold loan. Additionally, documentation fees may apply. The valuation of gold may incur fees. Renewal fees may also be charged by lenders based on the loan amount, along with stamp duty according to state laws. If you fail to make your payments on time, you may have to pay a penalty fee. Prepayment/foreclosure fees may also be charged by your lender based on when you close the loan. Lenders charge different amounts for different services. Make sure you compare these as well.
It is possible to get a gold loan if you own gold jewellery. A salaried professional or even a housewife or farmer can be in this category.
Gold loans usually have short tenures of three to twelve months. You may, however, be able to extend your repayment period with some lenders. You can extend the term of your loan with other lenders
As the terms are short, you need to be sure that you can pay the loan back on time. A lender may auction the pledged gold to recover the loan amount if you fail to repay it within the tenure.
Before confirming the loan amount, lenders evaluate the purity and weight of the gold. The gold appraiser determines the market value of gold based on its purity and weight. Depending on the market value of the property, the lender might offer a loan of up to 75%. The loan to value ratio (LTV) is used to calculate this.
The gold loan amount granted cannot exceed Rs 75,000 if the gold’s value is Rs 1 lakh. It is also possible for some to receive a smaller loan amount. The borrower’s repayment capacity is also often considered by lenders. The credit score is not taken into account by lenders, unlike personal loans.
It may vary from lender to lender how the gold jewellery is stored, but great care is taken. Gold is kept under tight security after a loan has been granted and disbursed. Electronic vaults with motion detectors and CCTV cameras are used by lenders to protect their assets. Gold pledged by you may even be insured by some lenders. This prevents it from being stolen. Robberies still result in a refund of the gold’s market value in the event of a robbery.
A flexible repayment option may be available to you depending on your lender. Several lenders offer a monthly interest-only payment option. This situation requires that the principal amount be paid at the end of the loan term. If you wish to pay off the gold loan through EMIs, you can do so.
CONCLUSION
It is usually cheaper to get a gold loan than to get a personal loan. The gold loan process is faster than most loans, so it can help you if you are in need of funds immediately.
