A gold loan is a secured loan that is lent by the lending institutions against gold ornaments. Gold ornaments like jewelry or bank-minted coins are used as collateral. It is just the 99.99 percent gold value calculated which means only the pure gold metal is assessed at the time of valuation and calculating the loan amount. The gems, stones, and any other metal is not considered.
The loan is given to the borrower against this gold as collateral.
Apart from public and private banks such as SBI Bank, ICICI Bank, HDFC Bank, etc., Non-banking finance companies (NBFCs) also offer gold loans to individuals. NBFCs that offer gold loans include Muthoot Finance, Manappuram Finance, etc. Both the banks and NBFCs have their benefits while availing of the loan.
When it comes to avail a loan in an emergency, we would still have some questions -
The maximum amount of gold loan depends upon the gold pledged. The gold is evaluated and the borrower is offered 75% of the total gold pledged. Borrowers should be aware of the fact that at the time of valuation only the pure yellow metal is taken into account. In the case of gold jewelry the other metals, stones, and gems are not considered while evaluating the gold. For the SBI bank, the maximum amount goes up to Rs. 20 lacs. On average, taking all the lending institutions into account the minimum starting gold loan rate is Rs. 15,000 and the maximum goes up to Rs. 5 crores. But the loan to value ratio will always be 75% of the whole amount. The left 25% is kept as margin by the bank, for the safe side in case you are unable to repay the loan.
The same is the case with the tenure of the loan. It varies from one lender to another. HDFC bank offers the tenure from 3 - 24 months, whereas the SBI bank’s maximum tenure is 36 months and the largest NBFC providing gold loans, Muthoot finance gold loan has different loan tenures for different gold loan schemes.
The loan is given to the borrower against this gold as collateral.
Apart from public and private banks such as SBI Bank, ICICI Bank, HDFC Bank, etc., Non-banking finance companies (NBFCs) also offer gold loans to individuals. NBFCs that offer gold loans include Muthoot Finance, Manappuram Finance, etc. Both the banks and NBFCs have their benefits while availing of the loan.
When it comes to avail a loan in an emergency, we would still have some questions -
- The rate of interest
- Loan tenure
- Maximum amount in return
The maximum amount of gold loan depends upon the gold pledged. The gold is evaluated and the borrower is offered 75% of the total gold pledged. Borrowers should be aware of the fact that at the time of valuation only the pure yellow metal is taken into account. In the case of gold jewelry the other metals, stones, and gems are not considered while evaluating the gold. For the SBI bank, the maximum amount goes up to Rs. 20 lacs. On average, taking all the lending institutions into account the minimum starting gold loan rate is Rs. 15,000 and the maximum goes up to Rs. 5 crores. But the loan to value ratio will always be 75% of the whole amount. The left 25% is kept as margin by the bank, for the safe side in case you are unable to repay the loan.
The same is the case with the tenure of the loan. It varies from one lender to another. HDFC bank offers the tenure from 3 - 24 months, whereas the SBI bank’s maximum tenure is 36 months and the largest NBFC providing gold loans, Muthoot finance gold loan has different loan tenures for different gold loan schemes.
Conclusion:
To conclude, there is no specific or fixed maximum amount or tenure. It all depends on the lending institution you are getting a loan from. The borrower should hence verify and check all the important bullet points before finalizing a lender.
To conclude, there is no specific or fixed maximum amount or tenure. It all depends on the lending institution you are getting a loan from. The borrower should hence verify and check all the important bullet points before finalizing a lender.
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