Gold loans are in demand due to the severe hit of the Novel Corona-virus. They are secured loans and hence are preferred by the customers who have gold ornaments to pledge as collateral against money. The gold loan application is easy and quick if you know about them in detail.
Every household in India own gold, in our ethnic culture, gold is the most appropriate and auspicious gift one could give on any/every occasion. Even though the gold ornaments have sentiments attached to them, people have become practical enough to pledge them against money if necessary. In recent years, gold loans have become a huge demand. Taking a look at the market, several banks introduced various schemes for gold loans. Muthoot gold loan, ICICI bank gold loan, IDBI Bank gold loan, Kerala Gramin bank gold loan, UCO bank gold loans are just a few fishes amongst the marine.
Gold loans are subjected to fraud as well, the above banks being reliable and famous don't indulge in forgery. Though there are small scale banks that loot people and take their gold in the name of the loan. One needs to be aware of such banks, once the yellow metal goes, it takes double the effort to earn it back! In this article, we'll tell you everything you need to know about gold loans! (Thank us in the comments section)
- Why are gold loans cheap?
Gold loans depend on two factors, the purity of the gold and the gold prices. If the purity of your gold is above 18-carat then the bank shall accept it. The second factor is gold prices, all of us know that gold prices keep fluctuating every day (not like some gangster does it) but it happens. If the gold prices are high, the gold loan interests will be less. If they are the gold prices are low then the gold loan interests will be high. The processing fees and other extra fees are cheap too, hence the summation of all the fees makes gold loans altogether cheap. This has been explained in detail, in one of our articles too.
- Convenience at its best
Surprisingly, gold loans have several schemes and options to browse through. One can apply physically and online for a gold loan. Similarly, one can even pay their loans in various ways. This makes it a consumer-friendly scheme and totally in trend. The tenure of gold loans ranges from 3 months to 24 months. However, one has to pay off the loan in 30 months.
- Too valuable to be true
The pandemic has absorbed every one’s wealth, unemployment is increasing and GDP has stooped too low. In this case, gold loans are seen as a ray of hope, considering the demand RBI has done some changes in the gold loan schemes. In gold loans, there is something called LTV (loan-to-value) percentage. This percentage determines how much loan one deserves against the value of their gold. RBI just recently has increased this percentage from 75 to 90. Earlier one could get 75% of the value but now one can get 90% of the value. This step is beneficial in both ways, banks have seen an increase in their customers and customers are happy because they have better scope for the money that they deserve.
- Exciting schemes
How great would it be if another bank paid your loan off? Gold loans offer you a similar scheme, under which this can be possible. For example, initially, you took a loan from the Indian Overseas gold loan bank, the loan is of 4000 and you could only pay off 2000. Then, under the gold loan refinancing schemes, you could go to another bank, for example, HDFC gold bank, and pledge the same gold that you did in the previous bank. Now, the HDFC bank will settle your loan with Muthoot bank. And, you have to pay money according to the gold loan interests rate of HDFC bank.
Conclusion: Now, you know everything about gold loans and their interest rates. This is the basic information that may slightly differ according to various banks and their schemes. Gold loans are transparent types of loans, they mostly have no hidden charges. Gold loan per gram rate has a direct effect on gold loan interest rates. We hope that this article enlightened you, if you have any more queries related to gold loans or just any other loans feel free to call us and ask for a consultation.
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