Your ultimate guide to Gold loans

 

Gold loans are loans granted in return for depositing gold ornaments as collateral with the lending institutions. The concept of lending money in exchange for gold as collateral has been a part of Indian culture for centuries. However, the banks and non-banking financial companies have come into play a few years back. It was the pawnbrokers and jewelers who used to lend money on gold ornaments.

Gold loans are comparatively cheaper for short-term credits as compared to credit cards and personal loans. Being a secured loan provides us with low interest rates.  

Knowing about what you are getting into is important. So let us have a quick guide about the features of the loan.

Important things to know:

• The purpose and how much loan amount is to be borrowed should be clear. 
  
  
• Lenders have now started offering gold loans up to 90% of the total loan amount after the new norms by RBI in this pandemic. 
  
  
• Bank-minted coins get higher value offered because of the gold purity than gold jewelry. At the time of valuation the gems, stones, and other metals used in the gold jewelry are not taken into account of the total loan amount.
  
  
• Anyone who has gold in their name and is above the age of 18 years can apply for this loan.
  
  
• The gold loan interest rate can vary from 10-20% and is repayable between the tenure ranging from 12-60 months. Both of them depend upon the lending institutions. 
  
  
• The fluctuation of gold prices does not affect the loan amount borrowed. Since you are not bound to repay the price of gold, just the loan amount borrowed it. The repayment amount is not affected by the fluctuation be it that the price falls so low that the amount borrowed is more.
  
  
• The gold is collateral here, thus the paperwork involved is minimal. 
  
  
• The loan disbursal time is within 24 hours of approval.
  
  
• The borrower should have a comparison and knowledge about all the landers before finalizing from where to take a loan from.
  
  

Conclusion:

Above is a quick guide to gold loans which will help the borrowers who are availing of a gold loan for the first time and have no idea for the same. We at Diala bank also provide all the detailed information with just a click away.

Also read this: Gold Loan Interest Rate Calculator