Most households in India have gold articles lying idle in their lockers. But the good news is that they can be put to good use when you need them the most. When in urgent need of money, you can use your gold articles to fund your immediate financial requirements. Not by selling your gold, but by pledging it to a lending institution. There are various banks and NBFCs across India that offer gold loans to their customers at attractive interest rates. But before applying for a gold loan, you should be aware of its procedure, merits, and demerits, which are further discussed in the post.
The procedure for a gold loan varies from one lender to another. The idea of a gold loan is simple; you pledge your gold articles and get the loan amount in lieu. To do so, you visit a lending institution with the gold you want to pledge and the required documents. The lender performs gold purity checks and determines its weight based on which it evaluates its market value. Gold loans can be sanctioned for up to 80 percent of the calculated value of the pledged gold. Once the value of the pledged gold is evaluated, the documents are verified. And once everything seems good and promising to your lender, they approve your loan.
Nowadays, the gold loan can also be applied online through the bank’s or NBFC’s mobile application or official website. But applying for a gold loan online does not mean that you will not have to visit your lender. To avail of the facility of the online gold loan, you will have to visit your lender at least once to deposit your gold articles. Once this is done, you can register yourself at the lender’s customer portal or mobile application and link your bank account with it. So in the future whenever you require money urgently, you can apply for a gold loan and get the available credit disbursed in your bank account anytime anywhere in just a few minutes.
And the best place to apply for one is Adyama gold jewelers. With the lowest rates of interest, and a much higher return rate than anyone, and with our new and top XRF machine, we will get you out as much cash as you might need. No worries.
Gold loans are secured loans and thus include lenient eligibility criteria and minimal documentation. It does not even require a credit score for loan approvals. And therefore, 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.
As compared to unsecured loans such as personal loans, gold loans, which is a secured loan, charge a lower rate of interest. Also, if you attach another asset as collateral, the gold loan interest rate can be lowered further.
Many banks and NBFCs levy zero processing fees on gold loans. Even if a lender charges processing fees, it is usually 1%.
Some lenders don’t levy any pre-payment charges while some banks do charge a pre-payment penalty of 1%.
Lenders generally do not inquire for income proof in gold loans as the loan is secured against gold. Therefore, anyone can apply for a gold loan whether earning or not.
Unlike most loans, gold loan approval does not depend on your credit score. In the case of other loans, the loan amount is given based on the repayment capacity and credit history of the borrower but in the gold loan, the loan amount is decided on the market value of gold.
Ina gold loan, you get a certain percentage of the market value of the pledged gold as the loan amount. The loan amount is decided based on the LTV (Loan to Value) ratio. This ratio varies from lender to lender and goes up to a maximum of 80% of the value of the pledged gold. This means that if the market value of your gold is Rs. 5 lakhs, you can get a maximum of Rs. 4 lakhs.
In case of a gold loan default, lenders have the legal right to freeze your assets and auction them to get the outstanding gold loan amount.
So, the next time you are planning to get on with getting a gold loan, you need to remember what’s right for you. So, think of who you need to go to when you need a gold loan. Because, after all, you do need a friend in time of need who you can trust, and we here at Adyama Gold Jewellers strive to be hard at work to be that friend. After All, when you sell your gold to Adyama Gold Jewellers, you get the guarantee of the best rates, with the best service in any way you desire, without the added harassment and tensions it comes with taking a gold loan.